Major US companies are ramping up their spending on capital projects to a quarterly record despite fears of a potential recession. The Wall Street Journal writes about it. According to S&P Dow Jones Indices, which analyzed data for approximately 90% of the index components, capital expenditures among S&P 500 companies will exceed $200 billion in the third quarter, corresponding to an increase of approximately 20% compared to last year.

Spending on categories such as real estate, equipment and technology is generally welcomed by investors and seen as a sign of confidence from executives trying to expand deals and spur growth. But investors are penalizing some companies, such as Meta Platforms Inc., for spending large sums on ambitious projects with no clear advantage. In light of the uncertain economic climate, some investors say they are looking for companies that can spend money on projects that will pay off in the short term.

They hope that these companies will have a good opportunity to increase market share and emerge from a potential recession in better shape than their counterparts. At the same time, they argue they are not willing to wait to see if the big spending pays off as the US Federal Reserve continues to aggressively raise interest rates. Meta spent $9.5 billion on capital projects in the third quarter, the second largest among companies in the S&P 500, and more than double spending a year earlier. The tech giant projects capital expenditures of up to $39 billion in 2023.