His 2006 research found that companies that have the biggest increases in capital spending have subsequently had damped stock returns. Capital spending has been growing rapidly in the tech sector, where companies that have seen some of the biggest share-price growth in recent years are becoming increasingly capital intensive. More than half of the growth in first-quarter capex spending can be attributed to the tech sector, Credit Suisse data show. To be sure, not all big capex spending companies have struggled to gain ground in the stock market. “You do not want to see companies spending above their normal trend.

Source: Wall Street Journal May 15, 2018 09:33 UTC