In our recent monthly investment letters, we have highlighted the uniquely low correlation between technology and energy/natural resources. Despite similar equity performance, over one-year time frames, equity performance was negatively correlated, with very minimal but positive correlations over three years. This month, we examine a potential causal factor – surging tech CAPEX and still-low resources CAPEX.
01 / The question
Why are Natural Resources and Tech moving so differently?
In our January 2026 monthly investment letter, we looked at one- and three-year equity correlations between technology and other market sectors. A number of sectors maintained low correlations to Tech over three years while turning increasingly negative over one year, a relatively unusual combination.
The more we considered the attributes separating those sectors from technology, one potential explanation kept standing out: capital spending.
The sectors spending the most have not been the sectors producing the strongest returns.
02 / The capex split
AI spending expectations exploded. Natural Resources stayed comparatively disciplined.
To investigate the relationship, we looked at the change in sell-side analysts’ 2026 capex estimates from the beginning of 2024 through mid-August 2026. That window captures the acceleration of the AI data-center buildout and the corresponding change in spending expectations across public companies.
The increase in estimated spending for technology companies was extraordinary. Amazon’s estimated 2026 capex increased 239%, Meta’s increased 277%, and Alphabet’s increased 392%.
2026 capex growth vs. stock performance
The market split has been unusually clear.
Lower capex growth
Integrated oil + diversified mining
Capex expectations moved far less even as these businesses benefited from growing resource demand, including demand associated with data-center construction and power use.
2026 equity performance
Stronger year-to-date returns.
Higher capex growth
Big Tech + utilities
Spending expectations rose sharply as investors and companies embraced years of expected AI and data-center growth.
2026 equity performance
More moderate year-to-date returns.
Source: Bloomberg, Recurrent Advisors. Data as of 8/14/2026. Integrated oil: XOM, CVX, BP, CVE, SHEL, SU, TTE. Diversified metals/mining: AAL, BHP, GLEN, RIO, TECK, FCX. Technology: GOOGL, AAPL, META, AMZN, MSFT, TSLA. Utilities: NEE, SO, DUK, CEG, AEP, D, SRE.
03 / The return split
The largest capex increases did not produce the strongest YTD returns.
Technology and utility companies have delivered more moderate equity performance in 2026 despite tremendous long-term growth expectations. Integrated oil and diversified mining companies, by contrast, experienced much smaller increases in capex expectations and stronger year-to-date equity returns.
That does not mean capex alone determines stock performance. It does show that a massive increase in spending is not automatically a bullish signal for shareholders. In 2026, the relationship has pointed in the opposite direction.
What we were watching
AI capex
Sell-side estimates for Big Tech and utilities rose rapidly as data-center spending plans expanded.
NR capex
Integrated oil and diversified mining companies maintained much more restrained spending expectations.
Returns
The lower-capex oil and mining groups produced stronger 2026 YTD stock performance than the higher-capex Tech and utility groups.
04 / Why it mattered
More spending is not the same thing as more shareholder return.
Market enthusiasm around AI and data centers has naturally focused attention on growth plans and buildout commitments. But capital intensity matters. The companies receiving the loudest growth signal are also being encouraged to commit dramatically more capital.
That distinction is central to our broader capital-cycle work. High valuations can encourage companies to spend aggressively, while lower-valued Natural Resources businesses face a very different incentive: remain disciplined, return capital and demand a higher hurdle rate for new projects.
Recurrent Research
This research note is adapted from the Natural Resources discussion in Recurrent’s July 2026 Monthly Investment Commentary.
Historical research reflects the views and information available as of the original publication date. It is presented for informational purposes and should not be construed as investment advice or a recommendation to buy or sell any security. Forward-looking statements are not guarantees of future results.