Markets experienced a turbulent session on Wednesday as four giant technology companies, representing a quarter of the entire stock market's value, released their quarterly results. Microsoft, Meta, Alphabet, and Amazon—the most prominent names in tech—are engaged in a fierce rivalry with OpenAI and Anthropic to dominate the future of artificial intelligence.
Market Reactions to AI Spending
Christian Hoffmann, head of fixed income at Thornburg Investment Management, told the Daily Mail: 'Markets are moving quickly to pick winners and losers from AI.' The shares of all four companies fluctuated between modest gains and steep losses in the minutes after the market close at 4 pm EST, dragging broader indexes like the S&P 500 and Nasdaq Composite along with them.
Initially, Wall Street analysts were puzzled by the dramatic swings, as all four firms reported sales and profits that exceeded expectations—typically a signal for investors to buy. However, the cause of the chaos soon became clear: updates on plans to purchase and construct the chips and massive data centers enabling AI.
Mark Malek, chief investment officer at Siebert Financial, told the Daily Mail: 'Tonight these companies have to stand up and show us what that spending is producing.' He noted that collectively, the four firms had committed nearly $700 billion in so-called 'capital expenditures' for 2026 alone. Hoffmann warned of 'a potential hangover if the rate of investment slows.'
Earnings Beat but Market Skepticism
Microsoft, Meta, Alphabet, and Amazon all reported earnings and revenue that broadly surpassed Wall Street's high expectations. Yet, one analyst observed that good is no longer sufficient in this market. Jay Woods, chief market strategist at Freedom Capital Markets, told the Daily Mail: 'When it comes to these mega-cap companies, we continue to see the theme that good is not good enough.'
Among the four, Google and YouTube parent Alphabet emerged as the winner on Wednesday, with shares rising around 6 percent after disclosing massive growth in its cloud computing segment. Revenue reached $20 billion, well ahead of the $18 billion anticipated by analysts.
Shares of Amazon fell by about 3 percent after the close, despite stronger-than-expected growth in its critical AWS cloud computing business. AWS sales jumped nearly 30 percent year-over-year to $38 billion, which CEO Andy Jassy noted as the division's fastest rate in over three years. However, the company also reported a sharp drop in free cash flow, driven by enormous AI investment.
Meta reported profits and revenue that widely beat expectations, but investors were spooked by the raised full-year outlook for capital expenditures. Meta reported $20 billion in capital expenditures for the first quarter, well above the $13 billion from a year ago but below the $27.6 billion analysts had expected.
Microsoft delivered a surprise gain in sales at its Azure cloud computing business, but spending growth exceeded Wall Street's models. Shares of Microsoft were down a few percent after the close.
