After a marquee week for Big Technology earnings, Wall Street is left wondering which hyperscaler stock offers the best path forward. The four U.S. hyperscalers — Alphabet , Amazon , Meta Platforms and Microsoft — all reported earnings this week, giving investors a clearer read on how their massive bets on artificial intelligence are reshaping balance sheets and market sentiment. While each talked up their AI strategy, analysts focused on the scale of the investments and how these plans will start translating to tangible returns. “Strong AI spending has been the biggest drivers of AI performance so far, and the positive CapEx outlook should continue to underpin the AI-led rally over the next 6–12 months,” UBS said. The market reaction to these hyperscalers’ reports varied widely this week, and investors appear to have different reasons to be optimistic about each name. Going forward, investors will need to decide whether they buy the dip on the losers or stick with the hyperscalers that have taken off this week. Meta Of the four, Gene Munster, managing partner at Deepwater Asset Management, said he favors Meta, especially after its recent pullback. Shares are tracking to end this week down more than 10%. Meta plunged more than 11% on Thursday after the company narrowed its capex guidance to between $70 billion and $72 billion, from a prior range of $66 billion to $72 billion. “Why the stock reset is that the script got flipped on the relationship between revenue growth and expenses,” said Munster. “What gets lost in that script flip is Meta’s been a huge beneficiary of AI.” META 5D mountain Meta, 5-day Meta carries a narrative that it doesn’t have a direct benefit from AI like companies with cloud offerings, Munster said. But AI has helped drive engagement to “crazy good” levels on its social platforms and led to advertising growth, he said. To be sure, Mizuho’s trading desk told clients that Meta’s sell-off is due more to stock-specific challenges than its AI spending outlook. “For now, most companies are still getting the benefit of the doubt that they will eventually get [r]eturns on these massive investments,” the desk wrote in a note. Microsoft Bank of America remains most constructive on Microsoft, noting that the company doesn’t rely on speculative long-term promises to justify its AI investments. Microsoft forecast a 45% rise in fiscal 2026 capital expenditures as it looks to boost AI capacity by more than 80%. Shares fell around 3% on Thursday and were down nearly 2% in midday Friday trading in the wake of that guidance. “I believe MSFT is extremely attractive and obviously ownable here – the business doesn’t require existential faith in a black box, or founder vision or 10 year numbers, etc.,” the bank wrote to clients in sales commentary. “I believe it’s a balanced and great risk/reward way to invest” in the current cycle’s mega themes. MSFT 5D mountain Microsoft last 5 days Amazon Amazon saw its stock soar after the company beat on earnings and revenue, and said capex this year will be about $125 billion, up from a prior forecast of $118 billion. This quarter marked a turning point for Amazon. After several quarters of concern that the company was becoming an “AI loser,” Amazon Web Services’ revenue growth accelerated by 300 basis points to 20% year-over-year — ahead of expectations, according to Deutsche Bank analyst Lee Horowitz. “Incremental dollar share relative to peers expanded in the third quarter for the first time this year, a metric that we believe will give investors comfort that AWS is not a doomed perpetual share loser in AI,” said Horowitz in a note to clients. AMZN 5D mountain Amazon last 5 days Alphabet Alphabet raised its full-year 2025 capital expenditure forecast again and expects a “significant increase” in 2026, citing strong cloud demand and AI growth opportunities. Bernstein’s Mark Shmulik said Alphabet’s ballooning capex is a fair trade-off for its accelerating momentum. The company now expects to spend $91 billion to $93 billion in 2025, up from roughly $75 billion just a few quarters ago — a steep increase, but one Shmulik said is justified by the returns so far. “But if these are the returns and momentum we’re seeing from investments so far? We’ll take this trade all day vs. where sentiment was at the start of the year,” Shmulik said in a note. GOOGL 5D mountain Alphabet shares, week to date — CNBC’s Michael Bloom contributed reporting.
