What’s happening?
In Q2 (April–June), tech giants like Microsoft, Meta, Alphabet (Google), and Amazon showed strong earnings driven by surging demand for AI-powered services across cloud computing, search, and advertising.
Capital Expenditures Go Through the Roof:
- Microsoft: Announced a record $30 billion spend this quarter; Azure cloud sales hit $75B annually.
- Alphabet: Raised 2025 capex by $10B to $85B.
- Meta: Boosted capex forecast to $66–72B.
- Amazon: Estimated $118B in total 2025 spend.
These staggering investments in data centers, infrastructure, and AI talent are fueling rapid product rollouts – from Microsoft’s Copilot AI to Alphabet’s Gemini and Meta’s LLM-powered features.
The Market Loves It:
- Microsoft stock surged 4%, topping $4 trillion in market value.
- Meta jumped 11.3%, adding $200B to its value.
- Even though Amazon’s cloud results disappointed slightly, its long-term AI bet remains strong.
Why It Matters:
- AI is becoming the core business driver, not just a futuristic side project.
- Big Tech is outspending competitors to stay ahead – betting on long-term dominance in AI.
Investors, once skeptical of high capex, now see clear revenue returns from AI investments.