Megacap tech stocks saw extreme divergence post-earnings, with AI spending trends driving sharp gains and losses in market value.
Amazon and Microsoft surged a combined $1.04 trillion in market capitalization over two days, while Apple and Meta Platforms lost $510 billion. The moves followed earnings reports that highlighted shifting investor sentiment around AI investments and capital expenditures.
Microsoft and Amazon had underperformed the S&P 500 and Nasdaq earlier this year due to concerns over AI-related spending. Apple, favored for its high free cash flow and limited capex, saw shares decline after earnings revealed margin pressures from memory chip costs. Meta’s free cash flow contracted sharply amid rising AI and operating expenses.
Amazon’s stock rallied after Amazon Web Services reported its fastest growth, signaling strong demand for cloud and AI infrastructure. The divergence underscores how AI-driven capex is reshaping valuations in the tech sector.