Alphabet, Meta, and Microsoft crushed earnings this week, pushing Big Tech stocks up by over $350 billion. Microsoft hit $4 trillion market cap, joining Nvidia, while Meta surged 11%, nearing $2 trillion.
Cloud growth at Google and Microsoft and better ad pricing helped justify mega investments. These giants, plus Amazon, are on track to spend $350 billion on AI infrastructure this year — topping $400 billion by 2026.
Microsoft CEO Satya Nadella promised $120 billion investment in the next year to “scale data centre capacity faster than any other competitor.” Meta is planning a Manhattan-sized data centre in Louisiana called Hyperion, with $105 billion capex next year. Zuckerberg is luring AI engineers with pay in the hundreds of millions. 
The market is warming up to Big Tech’s AI bet after past skepticism. Demand for AI compute and visible revenue gains eased fears about the costly spending sprees.
Jim Tierney, head of US growth fund at AllianceBernstein said:
“While there is no end in sight for spending, the narrative has shifted dramatically, as these companies are now showing the returns.”
Meta’s price per ad rose 9% YoY. The number of ads grew 11%.
Figma’s IPO added fuel to the fire. Shares jumped 250% on debut, valuing the design software maker at $60 billion — triple Adobe’s 2022 buyout offer.
Drew Dickson from Albert Bridge Capital warned:
“If we’re not there already, we are close to the fervour stage. Markets are wildly optimistic. No one wants to think about the downside. They just want to be a part of this.”
Amazon bucked the trend. Shares fell 7% despite beating estimates. AWS cloud growth slowed compared to Microsoft Azure and Google Cloud. CEO Andy Jassy flagged risks from Trump’s tariff moves, which could hit supply chains.
Apple logged 10% revenue growth, fueled by steady iPhone sales. The company plans to increase AI spending to catch up in device integration. Shares barely moved. Apple faces China, Taiwan, India tariff risks.
Big Tech’s legal headaches persist. Antitrust suits threaten Meta’s WhatsApp and Instagram, probe Microsoft cloud, sue Amazon for price manipulation, and challenge Apple’s closed ecosystem. Alphabet’s Google may need to sell Chrome and share search data after three antitrust losses.
Nvidia’s Q2 is the last Big Tech report this quarter. Its $4.3 trillion valuation rides the AI boom, with expected revenue up 50% to $45 billion.
Drew Dickson added:
“Tech is blowing out the numbers, so continues to get all the attention.”
“When they built the railroads in the 1880s, the equity values initially went nuts until reality set in, same story for radio stocks in the 1920s, and ‘dot-coms’ in the 1990s.”
“We will reach that stage with AI that we’ve seen time and time again. Everything today is being lifted by the tide. There will eventually be winners and losers, but that won’t be clear for a while.”
