MW Alphabet, Meta, Amazon and Microsoft share this one thing - and it'll keep the stocks fired up

By Daniel Newman

To anyone still shouting 'bubble': Please sit down

Artificial intelligence (AI) will drive Big Tech earnings for a long time to come.

Comparing today's AI wave to the dot-com bubble is nonsensical.

The latest round of tech earnings didn't just defy expectations, they incinerated them. Short-term market pullbacks and headline-grabbing selloffs may stir up anxiety, but they rarely shift the long-term narrative.

Especially not when you're watching tech giants Microsoft $(MSFT)$, Meta $(META)$, Amazon (AMZN) and Nvidia (NVDA) smash Wall Street outlooks, reaffirm sky-high capital expenditures and power up for what looks like an incredibly long AI runway.

For anyone still shouting "bubble" - please, take a seat. Not all booms are alike. Comparing today's AI wave to the dot-com bubble is nonsensical. Back then, Pets.com and its venture-backed peers were running on fumes and hype. Today's AI players are throwing out billions of dollars in free cash flow, stacking operational leverage and dominating global infrastructure.

Microsoft's Azure added more than $4 billion in cloud revenue in a single quarter. If AWS grows at 17% and Azure keeps cruising at 39%, Microsoft could become the largest cloud provider within four years. Microsoft Chief Executive Satya Nadella's strategic showmanship, especially with OpenAI, is as close to modern empire-building as tech gets.

Meta may be the most formidable AI application company not named Nvidia.

Meta has 3.4 billion daily users and is likely to become the next $3 trillion company. Moreover, with more than 1 billion monthly active users on AI-powered features and a playbook focused on turning billions of dollars in talent investments into trillions in market cap, Meta may be the most formidable AI application company not named Nvidia. CEO Mark Zuckerberg's ambition to build a 1-gigawatt supercluster speaks volumes - not just about compute scale but about audacity.

Meta has built the New York Yankees of AI research teams.

Along the way, Meta has built the New York Yankees of AI-research teams. And with nearly half the world logging some type of Meta-owned property, it is the best-positioned company in the AI consumer app space.

The earnings data isn't debatable:

-- MSFT FY2026 Q1: $30B

-- META FY2026 Guide: $100B

-- GOOGL FY2025 Guide: $85B

These aren't speculative numbers. Meta and Microsoft delivered blowout quarters, reaffirmed spending and extinguished bearish bets - for now.

If anything, this latest earnings cycle marked an inflection point. Microsoft, Meta and Amazon posted numbers that suggest strength not just in consumer demand, but in the enterprise backbone driving AI and digital transformation.

Apple falls from the AI tree

Does Meta have a product that could signal the beginning of the end for the iPhone?

In the AI boom, not all players are created equal. Microsoft and Meta are in a different class. Google is holding steady, but Apple? The jury's out.

Apple $(AAPL)$ CEO Tim Cook may say AI is "as big as the internet," but Apple's inertia on AI makes that hard to believe. The company posted record iPhone sales, but selling smartphones in the AI era is like being the best Jack Daniel's distributor while everyone else is opening molecular-cocktail bars.

Cook's recent AI tone is more aggressive, perhaps hinting at a deal with Perplexity or Mistral. If not, Apple risks falling further behind. Meta's XR ambitions already challenge Apple's long-held consumer-device supremacy.

Meta thinks XR Glasses can replace the iPhone and handset moat. I do think Apple's future depends on the handset remaining its primary device. But does Meta have a product that could signal the beginning of the end for the iPhone?

Nvidia is no longer only a semiconductor company.

As far as Nvidia, when its market cap flirted with $4 trillion, the bears got louder. But as enterprise demand surges - and on-premises AI spending remains dominant - Nvidia is just getting started.

Nvidia is no longer only a semiconductor company. Despite 85% of AI spend still being on-premises, Nvidia continues to scale like a macroeconomic force. Every major cloud provider - Amazon, Google, Microsoft - has Nvidia wired into their runway for growth.

AI-powered platforms with physical infrastructure and direct consumer engagement are the high-rises with a view. The bears may keep howling, but they've missed the plot - and the numbers prove it.

Daniel Newman is CEO and chief analyst at The Futurum Group, which provides or has provided research, analysis, advising or consulting to ServiceNow, Intel, Nvidia, Microsoft, Amazon.com, IBM, AMD and other technology companies. Neither he nor the firm have any positions in any of the companies cited. Follow him on X @danielnewmanUV.

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-Daniel Newman

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August 11, 2025 12:10 ET (16:10 GMT)

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