This week the biggest technology companies opened their books and showed investors what their AI spending is actually buying. The market did not react as one. It split down the middle.
On one side sat the clear winner. Microsoft reported 43% growth at its Azure cloud and its shares jumped as much as 17%. That added close to $450bn in a single day, the largest one-day gain in stock-market history. Its AI spending is now showing up as cloud revenue.
On the other side, the hardware behind all of it was in retreat. The 20 most valuable chip stocks lost about $1.3tn over the week, Nvidia alone shedding roughly $238bn, Mashable reported. SK Hynix, Samsung and Micron each dropped more than $100bn too. CNBC quoted Morningstar calling it a loss of confidence, not a change in the fundamentals.
Cloud gets paid. Capex gets questioned.
The dividing line was whether the spending had turned into something customers pay for. AWS grew 37% and lifted its margins, and Amazon’s stock rose. Yet the company’s free cash flow over the past year turned negative for the first time since 2023, as record data-centre spending piled up.
