By Serge Nussbaumer, Head of Public Solutions and capital markets expert at Maverix Securities

Amazon, Meta, Microsoft and Alphabet have all posted very strong, even excellent, quarterly results. The key takeaway is this: operationally, the tech giants continue to perform well. The crucial question, however, is how quickly their heavy investments in AI and cloud computing will translate into revenue, margin expansion and free cash flow.

Amazon: AWS surges, but capital spending weighs on sentiment

Amazon impressed with revenue of $181.5 billion, EPS of $2.78 and AWS growth of 28% to $37.6 billion. Guidance for the second quarter — with revenue expected between $194 billion and $199 billion — also came in above expectations.

Even so, the stock fell more than 3% after the market close. Investors acknowledged AWS’s acceleration, but grew concerned about heavy spending on AI and cloud infrastructure, margin pressure and free cash flow dilution.

Amazon remains in good health, but still has to prove that AWS growth, margin expansion and capital discipline can work in tandem.

Meta: stronger operating momentum, but maximum scepticism

Meta delivered a very strong quarter, with revenue of $56.3 billion, growth of 33% and EPS of $10.44. Even adjusted for the tax benefit, the result remains solid. For the second quarter, Meta expects revenue of between $58 billion and $61 billion. At the same time, its 2026 capital expenditure outlook was revised sharply higher, to between $125 billion and $145 billion.

The stock lost between 5% and 6.5% after the close. Rather than focusing on results that beat expectations, the market zeroed in on when the massive AI investments will start to pay off.

In the short term, capital expenditure is weighing on the valuation. Strategically, however, Meta remains highly attractive: the company is already visibly turning AI into better ad performance, higher engagement rates and more effective monetisation.

Microsoft: a high-quality name, but at a high price

Microsoft beat expectations with revenue of $82.9 billion and EPS of $4.27. Azure grew 40%, while Microsoft’s cloud business generated revenue of $54.5 billion. Meanwhile, capital expenditure rose to $31.9 billion and free cash flow fell 22% to $15.8 billion.

After the close, the shares were down between 1.8% and 2%. Azure’s better-than-expected performance convinced investors, but the rise in capital expenditure and the decline in free cash flow tempered the reaction.

Microsoft remains the benchmark compounder in cloud and AI. In the near term, however, the stock remains vulnerable as long as the market demands more proof of return on AI spending.

Alphabet: the clear winner

Alphabet reported revenue of $109.9 billion, up 22%, and EPS of $5.11. Google Cloud grew 63% to around $20 billion. At the same time, Google search query volume hit a record high, according to CEO Sundar Pichai.

The stock gained around 3.5% after the close. Alphabet delivered the strongest combination of above-forecast EPS, robust cloud growth, high cloud margins and diminished concern that AI will negatively affect search in the near term.

For now, Alphabet is challenging the thesis that AI will erode its search business. On the contrary: Search, YouTube, subscriptions and Cloud are becoming increasingly interconnected.

Alphabet and Meta remain our favourites

Over the next 12 months, Alphabet and Meta remain our favourites ahead of Amazon and Microsoft — the two companies currently best positioned to monetise AI-related investments rapidly.

Alphabet stands out for the strength of Search, the momentum in Cloud and easing fears of AI-driven disruption. Meta, while carrying the largest capex overhang, also shows the most direct operating leverage from AI in advertising and monetisation.

Amazon and Microsoft remain high-quality names. However, the market is currently more sensitive to spending levels, margin trajectories and free cash flow discipline at both companies.

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