Mag 7 Expected to Invest $650 Billion in Tech Amid Manufacturing Focus

Corporate America's investment focus has shifted from traditional sectors to technology, particularly in the wake of the tariff war initiated by President Trump. Key points include:

The Magnificent 7 (Mag 7) tech companies—Alphabet, Amazon, Apple, Meta Platforms, Microsoft, Nvidia, and Tesla—are projected to spend $650 billion on capital expenditures and R&D this year.
This spending exceeds the annual public investment by the U.K. government, highlighting a significant trend towards IT investment.
Investment in IT equipment and software has accounted for 6.1% of GDP, contrasting with declines in other sectors.
Factors influencing this shift include FOMO related to the AI boom and reduced investments in traditional sectors due to various economic pressures.
U.S. corporate spending on IT has risen to $1.45 trillion, marking a 13.6% increase year-over-year and making up over 40% of total private fixed investment.
Non-IT sector investments fell by 4.9%, continuing a three-quarter decline.
The ongoing emphasis on technology spending is expected to support the crypto market, as seen in the correlation between tech advancements and cryptocurrency performance.
Favorable regulatory policies under the Trump administration have also positively impacted the crypto landscape.

U.S. tech spending. (BEA, Lloyds Bank)