Just five big tech companies are projected to spend a total of $3 trillion on property and equipment over the next four years, and that rapid growth is making it harder to analyze their earnings.

The surge in capital spending for things like new gigantic data centers means depreciation expenses will be soaring in the coming years. Much of the equipment these companies are buying, such as chips for artificial intelligence, will be gradually written down in value over five or six years, hitting profits.

As capital expenditures have skyrocketed, controversies have occasionally flared over companies' moves to extend the useful lives of the assets they are depreciating. Even a small adjustment to an asset's useful life can now have a big impact on earnings. Meta Platforms said its $60.5 billion of earnings last year included a $2.6 billion boost from lengthening the estimates for the useful lives of its servers and network assets.

One major issue: Investors can't find depreciation expenses listed on the income statements for Alphabet, Amazon.com, Meta, Microsoft or Oracle. Nor is there any consistency among the companies in how they choose to report these costs. While this is a problem across many industries, not just tech, it is becoming more acute at the biggest AI hyperscalers . Apart from Amazon, which has long operated a massive logistics network, these companies are transforming from asset-light to asset-heavy businesses.

Contrast the tech companies' reporting methods with the longstanding approach by two railroad companies, in a quintessentially asset-heavy industry. Union Pacific and Norfolk Southern each report depreciation as a stand-alone operating expense on the income statement. That way investors know the other expense lines don't include any of it.

Companies include depreciation in their earnings because eventually their fixed assets will wear out or become obsolete. The practice ensures that the costs for capital investments are recognized over time.

The big tech companies' less-transparent approach makes it more difficult for investors to model their earnings and create forecasts. Outsiders can't see how much depreciation is allocated to each of the various expense lines on the income statement.

Depending on the company, some of it could be included in the cost of goods, which is used to calculate gross margins. Some could be embedded in research-and-development or general-and-administrative expenses, or other categories of operating expenses. This in turn makes it harder for analysts to project what those costs will be in future periods.

Rule changes to address the problem are on the way. Those, however, won't take effect for most companies until 2028. A new U.S. accounting standard approved in 2024 will require companies to disaggregate quarterly expenses into five specific categories, including depreciation, amortization of intangible assets, and employee compensation. Companies can always elect to adopt new standards early, but few do.

Even some Wall Street analysts, not generally known for complaining about companies' reporting methods, have begun raising concerns about current practice.

In a Jan. 28 note discussing Alphabet, Meta, Microsoft and Oracle, analysts at Morgan Stanley wrote: "Because these companies have historically been asset-light businesses, their financial disclosures are not adequately set up for investors to see where depreciation is reported in the income statement, and most consensus models do not directly forecast adequate impact on earnings."

The Morgan Stanley analysts said they expect expense forecasts for the companies will need to move higher to reflect greater capital spending, potentially driving margin expectations lower if revenue revisions don't keep pace.

Alphabet and Oracle report depreciation separately as a stand-alone line on the cash-flow statement, where they reconcile net income with operating cash flow. But that doesn't help much with modeling an income statement and the impact that depreciation has on each cost bucket. Amazon, Meta and Microsoft combine depreciation and amortization into a single line on the cash-flow statement, and then disclose depreciation expenses separately in footnotes.

Alphabet's depreciation expense in 2025 was $21.1 billion, or 5% of revenue, and analysts expect almost $78 billion, or 11% of revenue, in 2029, according to estimates compiled by Visible Alpha. Oracle's depreciation expense for fiscal 2025 was $3.9 billion, or 7% of revenue, and is expected to top $33 billion, or 18% of revenue in fiscal 2029.

The five big hyperscalers together reported $146 billion of combined depreciation and amortization for 2025, of which $104 billion was depreciation, according to a review of their filings. They are expected to report combined depreciation and amortization of $394 billion for 2029, according to Visible Alpha.

Wall Street analysts typically lump depreciation and amortization together for companies that do the same on their cash-flow statements. That explains why Visible Alpha doesn't track stand-alone depreciation forecasts for Amazon, Meta or Microsoft.

Here's a way for companies to score points with investors trying to understand their numbers: Don't wait for new rules to kick in. Start giving better expense breakdowns now.