Alphabet, Amazon and Microsoft added nearly $1.5 trillion in combined value this week

This week, Alphabet, Amazon, and Microsoft collectively added nearly $1.5 trillion in combined market value. The surge in valuations comes after these tech giants reported strong earnings and affirmed their capital expenditure forecasts. The three leading hyperscalers, Amazon, Microsoft, and Alphabet, all saw their market capitalizations soar following robust cloud growth.

Microsoft's market cap increased by over $600 billion, while Amazon and Alphabet each added more than $400 billion. Conversely, Meta experienced a stock plunge following weak AI investment strategy, eroding around $85 billion from its market cap. Apple also faced a significant drop in value, losing over $350 billion, due to a memory shortage impacting its outlook.

Tesla's market value declined by about $7 billion after reporting cash flow negativity and forecasting higher spending. Analysts estimate AI spending among the megacaps will reach nearly $800 billion within the next year, but investors remain uncertain about the long-term profitability of these investments. Apple's earnings and iPhone sales exceeded market expectations, but the company issued cautious guidance for the current quarter, citing supply constraints.

Apple's stock fell more than 7% on Friday. Amazon reported a 37% year-on-year increase in cloud computing revenue, the strongest expansion since 2021, and forecast its capital expenditures to reach $220 billion in 2026, up from $200 billion previously. This growth in AWS is seen as a sign that Amazon's infrastructure investments are meeting market demand.

Meta's stock saw an 8% drop, while Microsoft surged 15%, reflecting divergent views on the companies' AI strategies.