Big Tech Delivers Mixed Results as AI Spending Raises the Stakes on Payoff
Three out of four ain’t bad — but Wall Street rarely grades on a curve. Yesterday, four Magnificent Seven names reported quarterly results, and the outcomes were split down the middle. AmazonAMZN and AlphabetGOOGL delivered genuine beats, while MicrosoftMSFT underwhelmed on cloud momentum and Meta PlatformsMETA spooked investors with a ballooning spending forecast.
- Amazon’s revenue surged past estimates at $181.5B as AWS grew 28%, while Alphabet’s revenue grew to $109.9B thanks to 63% Google Cloud growth and a strong backlog.
- Microsoft Azure grew 39% in Q3, but capex missed at $31.9B, while Meta’s stock fell after market due to raising capex outlook to $125B to $145B on higher data center costs.
Payoff pending: AI spending is tying Big Tech together, but markets are getting stricter on results. Alphabet CEO Sundar Pichai pointed to 350M paid subscriptions, while Microsoft CEO Satya Nadella flagged a $37B AI run rate even as adoption doubts linger. Meta is still ramping up spending with major chip deals, keeping focus on when returns actually show up. Good results are table stakes, but only follow-through earns conviction in this market.