The artificial intelligence (AI) investing thesis has taken some interesting turns this year, fraying some investors’ nerves in the process. Among the issues weighing on large- and mega-cap AI stocks, including some residing in the Invesco QQQ Trust (QQQ) and the Invesco NASDAQ 100 ETF (QQQM), are the massive spending plans laid out by hyperscalers and the specter of AI rendering some corners of the software market obsolete.
Some of the largest AI spenders are also marquee holdings in the two Invesco ETFs . This group includes Alphabet (GOOGL), Amazon (AMZN), Meta Platforms (META) and Microsoft (MSFT), among others. In aggregate, those companies and other hyperscalers are pledging to spend hundreds of billions in the years ahead of AI. The tabs could eventually stretch into the trillions. Therefore, it’s logical that investors are scrutinizing these plans, but they may not need to fret.
This QQQ Holding Remains Bullish on AI
Microsoft, the third-largest holding in QQQ and QQQM, is an example of a once high-flying mega-cap tech that’s recently languished. It’s actually been hit by both of the aforementioned factors – AI spending and speculation AI will disrupt the software industry.
Regarding the latter point, some market observers argue that Microsoft has been unjustly punished. The stock may be a compelling value idea at current levels. As it relates to AI spending, Microsoft believes those expenditures will be validated. Speaking at the Morgan Stanley 2026 Technology, Media & Telecom Conference in San Francisco earlier this month, Microsoft Chairman and Chief Executive Officer Satya Nadella said AI spending will drive strong returns with benefits to software.
“We have to manage a capital-intensive business, but using all of the levers that software gives us in managing TCO, managing utilization, optimizing the kernels by workload, ensuring that there’s a diverse class of customers… those are all the things that I think will generate great ROIC [return on invested capital], and this is probably unique,” he said.
Specific to Microsoft, there’s more goods QQQ/QQQM investors will want to consider. Much of the AI-related spending corporate information technology departments are gearing up for is targeted at software, including various Microsoft products and services. That may imply the stock could resume being a driver of long-term upside for QQQ and QQQM.
“New data from a Morgan Stanley AlphaWise survey suggests that corporate IT leaders remain confident. Chief Information Officers in the U.S. and Europe expect software budgets to grow 3.8% this year, slightly above the 3.7% pace in 2025, with most spending directed to Microsoft products,” notes the investment bank.
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