Barclays

Big Tech's AI Spending Masks Earnings Risks

An opinion analysis of recent Big Tech earnings argues that exceptional revenue growth masks underlying risks driven by massive AI investments and accounting mark-ups. Microsoft, Amazon, Meta, and Google reported unusually high revenue growth, but also record capital expenditures (e.g., Google ~$45B and Amazon ~$54B in one quarter) and negative cash flows tied to AI infrastructure spending. Research cited estimates that OpenAI and Anthropic account for a large share of some platforms' AI revenue (e.g., ~73% of Amazon’s AI revenue and ~70% of Microsoft’s AI sales), raising concerns that Big Tech growth is heavily reliant on a small set of unprofitable AI companies. The piece concludes Big Tech would be re-rated if AI expectations fail, but the firms would not collapse — rather, they would be shown as mature companies reallocating priorities.

CoreWeave stock rises 14% as revenue doubles

CoreWeave shares jumped in premarket trading after the AI-infrastructure provider reported stronger-than-expected Q2 results and raised guidance. Revenue was $2.58 billion, up 112% year-over-year, and adjusted loss per share was $1.03 versus a $1.20 expected loss. Operating expenses more than doubled to about $2.6 billion, producing an operating loss of $49 million and a wider net loss of $626 million. Management reported a $104 billion revenue backlog (excluding more than $25 billion of recent commitments), 1.5 GW of active data-center power, and highlighted major customers and partners. It guided Q3 revenue of $3.4–$3.6 billion and full-year revenue of $12.4–$13.2 billion, flagged materially higher capital spending, and said regulatory headwinds and debt levels warrant caution even as several firms raised price targets.

Barclays Downgrades Gap, Cites Deep Promotions

Barclays downgraded Gap Inc. to equal weight from overweight and cut its price target to $20 from $26, citing sustained and increasing promotional activity across Old Navy and Banana Republic and weakness at Athleta. Analyst Adrienne Yih said Old Navy promotions remain elevated, Banana Republic has moved to deeper discounting, and Athleta is a drag without a clear path to improvement. Barclays' call contrasts with Wall Street consensus: LSEG data shows 12 of 21 analysts have buy or strong-buy ratings while nine rate the stock a hold. Gap shares were down about 16% year to date as of the article, and Old Navy same-store sales growth was reported at roughly 1% for the first quarter of 2026.