Tech earnings dominated the agenda last week and one theme ran through the major reports: the rising spending from the giants.
Google parent Alphabet reported traffic acquisition costs (TAC), a key metric that relates to how much the company pays to draw people to its various properties, rose above 28 percent to over $5 billion. This rise in cost was enough to send Alphabet shares down sharply in after-hours trade on Monday last week.
Amazon was a similar story. Its second-quarter earnings came in at 40 cents per share versus $1.42 per share expected, mainly because the e-commerce giant boosted investment. Spending on technology and content for example rose 43 percent year-on-year in the quarter. Amazon shares fell after-hours.
Facebook on the other hand reduced its forecast for its spending increase, which excited investors.
To me, the share price falls looked like a chance for investors to take profit on some tech stocks that have seen a stunning rally this year. But there's definitely some concern that costs could spiral out of control without any substantial return on profit.