The AI trade in 2026: profits at the edges, losses at the centre

Artificial intelligence remains the dominant theme driving markets in 2026, but profitability within that theme is not evenly spread. Data on operating margins across the AI value chain in the second quarter of 2026 shows a sharp divide between the companies building AI models and the companies supplying the infrastructure behind them. Infrastructure is turning a profit. The models feeding it are not.

The margin gap by segment

Companies building AI models and applications, namely OpenAI and Anthropic, averaged an operating margin of negative 59 percent in the second quarter of 2026. By contrast, silicon and equipment suppliers such as Nvidia, AMD, Broadcom, TSMC and Micron averaged positive 41 percent. Energy and grid providers, including Constellation Energy and NextEra Energy, averaged 24 percent. Compute and cloud providers, a group spanning Amazon, Microsoft and Alphabet alongside data centre operators such as Equinix and Digital Realty, averaged 11 percent. The further a company sits from the end user typing into a chatbot, the healthier its margin tends to be.

Hyperscaler capex is the transmission mechanism

This pattern depends on continued capital expenditure from a small number of very large buyers. Microsoft, Amazon and Alphabet each reported strong cloud growth in their most recent quarterly results, and all three have continued to guide toward substantial AI infrastructure investment through the remainder of 2026. That spending is what channels demand toward chipmakers, equipment suppliers and power providers, and it helps explain the margins seen in those segments.

Why it matters

“These numbers are fascinating, and more importantly they confirm the dependency the AI trade has on the big names staying active in their capital expenditure. That spending funnels investment into AI infrastructure, which in turn drives its margins higher. We view AI infrastructure as a safer bet at this juncture, and our positioning has reflected that view for some time now, favouring the infrastructure layer over the so-called hyperscalers themselves. Microsoft, Amazon and Alphabet have all posted strong growth in their cloud businesses, and if that trend persists, AI infrastructure should continue to profit accordingly, with margins ahead of the big names. For the rest of 2026, we expect this to hold as earnings growth remains intact. Factually speaking, some form of initial monetisation seems to be emerging, as the recent strong double-digit numbers reported by major companies in their Cloud offering is testimony of this. This augurs well for the foreseeable future also in terms of maintenance capital expenditure which is imperative to retain a competitive edge ” says Jordan Portelli, Chief Investment Officer at Calamatta Cuschieri Moneybase. 

FAQs 

Why are AI model companies losing money while chipmakers are profitable? 
Companies such as OpenAI and Anthropic are spending heavily on computing power, talent and research while charging relatively little for access. Companies further down the chain are selling into strong demand without carrying those research and development costs, which tends to support higher margins.

Does this mean infrastructure stocks are a safer investment than AI model companies? 
It suggests infrastructure providers currently show stronger margins, but no part of the AI value chain is free of risk. Those margins depend on continued heavy spending by a small number of large cloud providers, and any slowdown could affect the whole chain.

What should investors be watching heading into the next round of results? 
Hyperscaler capital expenditure guidance will be the key signal. It determines whether the AI infrastructure buildout continues at pace, and therefore whether the current margin gap holds.

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Calamatta Cuschieri Investment Services Ltd (C13729) is licensed by the MFSA to carry out investment services business in terms of the Investment Services Act (Cap. 370). The company is a subsidiary of Calamatta Cuschieri Moneybase plc and is registered at Level 0, Ewropa Business Centre, Dun Karm Street, Birkirkara BKR 9034, Malta.