Good morning. AI-driven capital spending is scaling rapidly, and the economics remain attractive and increasingly profitable—for now, according to JPMorgan Global Research’s midyear outlook.
Analysts see a broadening AI capex cycle underpinning growth expectations, led by “AI upstream” investments in data centers, chips, and supporting infrastructure. Much of this activity remains concentrated in the U.S., which accounts for about 85% of AI and machine learning venture capital, with spillover benefits expected in China, South Korea, and Taiwan through their roles in semiconductor supply chains.
That broad investment wave is also reshaping corporate strategy, as technology companies race to expand beyond their traditional markets and capture a share of the rapidly growing AI infrastructure opportunity. For example, Qualcomm is the latest major tech company to aggressively expand into the data center market.
While traditionally best known for its smartphone and mobile chip business, the company unveiled a comprehensive AI data center strategy at its Investor Day on June 24, targeting the rapidly growing AI infrastructure market. Qualcomm said it expects its data center business to generate more than $15 billion in annual revenue by fiscal 2029. If the company achieves this goal, the data center unit will become its single largest growth business outside of smartphones.
The company is “delivering a comprehensive roadmap for next-generation AI data centers—entering at a key inflection point with momentum from multi-year, multi-generation agreements with leading customers,” Qualcomm CFO and COO Akash Palkhiwala wrote in a LinkedIn post.
Meanwhile, memory chipmaker Micron reported a 346% surge in quarterly revenue on June 24 and profit of $28.2 billion for the quarter, nearly 15 times higher than the same quarter last year. Micron’s results briefly boosted investor sentiment after a selloff in AI and tech-related stocks earlier in the week, lifting futures for both the tech-heavy Nasdaq and the broader S&P 500, Fortune reported.
In its midyear outlook, released on June 24, JPMorgan also raised its estimate for global AI-related capital expenditures through 2030 to $5.5 trillion, up from $5.1 trillion, driven by greater capacity expansion and increased debt financing. The bank now projects AI-related debt financing will reach $4.1 trillion as loan-to-cost ratios rise.
Analysts also forecast continued growth in hyperscaler spending, with capital expenditures reaching $650 billion in 2026 and surpassing $1.1 trillion in 2027. Despite the rapid investment, profitability is expected to remain robust, with operating cash flow exceeding $900 billion by 2027. (You can read more about JPMorgan’s outlook here.)
Capital expenditures for hyperscalers like Amazon, Google, and Microsoft are reaching unprecedented levels. For example, Microsoft expects to invest roughly $190 billion in capital expenditures in calendar year 2026, a 61% increase from the previous year.
While all three companies continue to report rising AI-related revenue, investors remain focused on whether enterprise adoption and monetization will keep pace with the trillions being invested. For now, the AI investment cycle continues to accelerate, but whether those returns ultimately justify the scale of spending is likely to remain one of the market’s defining questions.
Sheryl Estrada
[email protected]
Leaderboard
Fortune 500 Power Moves
Christina Zamarro, EVP and CFO of The Goodyear Tire & Rubber Company (No. 239), will leave the company for another opportunity, effective July 10. Zamarro joined Goodyear in 2007 and has spent nearly two decades in financial leadership roles at the company, becoming CFO on January 1, 2023. “She has been a valued partner across the business, helping advance important initiatives and positioning the company for continued progress,” CEO Mark Stewart said in a statement.
Scott Deakin has been named interim CFO at Goodyear, effective July 1. A former public company CFO and multi‑industry operating executive, Deakin has more than 25 years of financial and operational experience and most recently served as CFO at Gypsum Management & Supply, Inc., a wholesale distributor of interior construction products, from 2019 to 2026.
Goodyear is conducting a comprehensive search process to identify a permanent chief financial officer.
Every Friday morning, the weekly Fortune 500 Power Moves column tracks Fortune 500 company C-suite shifts—see the most recent edition.
More notable moves
Adarsh Parekh was appointed CFO of Quantum Space, a defense and space manufacturer. Parekh, a space industry veteran, will oversee the company’s financial strategy as it advances development of the Ranger spacecraft platform and enters the public markets via a proposed combination with Inflection Point Acquisition Corp. VI (Nasdaq: IPFX). He joins Quantum Space from Sidus Space, where he served as CFO. Before that, Parekh was CFO of Terran Orbital, where he helped lead the company’s sale to Lockheed Martin.
Jason Knoblauch was appointed CFO of Fortrea (Nasdaq: FTRE), a global contract research organization, effective July 6. He will succeed Jill McConnell, who is stepping down. Knoblauch joins Fortrea from Clario, a provider of endpoint data solutions. Before that, he was CFO at Curia. Earlier in his career, Knoblauch served in various financial leadership roles at Pharmaceutical Product Development, including interim CFO.
Big Deal
Companies are heading into proxy season with less clarity and higher stakes, according to Freshfields’ 2026 Proxy Season report. Shifting SEC guidance and uncertainty around Rule 14a‑8 are forcing boards and management teams to respond more reactively to shareholders and activists, often in a more sensitive, politicized environment.
The report finds that proposal volumes remain elevated even as support levels become more selective, and that companies are facing increased scrutiny around ESG, governance, and political activity disclosures. It breaks down how engagement is changing, the pressure points emerging in boardrooms, and what companies can do now to prepare for a more volatile season ahead.
Going deeper
“A former Fed colleague of Kevin Warsh on what to expect: ‘Plan for higher rates'” is a Fortune article by Catherina Gioino.
Esther George, a former Kansas City Fed president, spent a decade dissenting in favor of tighter policy. Now she says Warsh may have no choice but to raise rates. George believes Americans “making long‑horizon financial decisions should stop expecting relief from borrowing costs and instead start preparing for them to rise,” Gioino writes. Read more here.
Overheard
“Historically, technology shifts have changed jobs more than they eliminate them—and employers are signaling that this transition will be no different.
—Sabrina White, SVP of school and industry engagement at the Graduate Management Admission Council (GMAC), told Fortune regarding findings of GMAC’s latest Corporate Recruiters survey.
