Evercore ISI head of internet research Mark Mahaney struck a cautious near-term tone on Big Tech while highlighting attractive valuations and long-term upside driven by AI.

He said these cuts could affect platforms reliant on both brand and performance marketing. While he emphasized that this reflects cautious corporate behavior rather than structural disruption, he expects companies to guide more conservatively for the June quarter if current conditions persist.

Mahaney said rising capital intensity reflects an ongoing investment cycle rather than a structural shift in tech economics. He expects 2026—or potentially 2027—to mark either the peak CapEx intensity or the trough in free cash flow, after which spending growth should moderate.

Over a three- to five-year horizon, he believes companies can return to high returns on invested capital, supported by a significantly larger AI-driven opportunity. Despite near-term caution, he said the long-term setup remains compelling for investors willing to look beyond short-term volatility.

Price Action: Meta Platforms shares were up 1.78% at $674.27, Alphabet shares were trading at $332.89, and Amazon.com shares were down 0.44% at $247.93 at the time of publication on Wednesday, according to Benzinga Pro data.

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