Microsoft led the charge, with the stock jumping more than 11% for the week, fueled by surging cloud and AI demand — and management’s clear, detailed take on both in the earnings call.
Azure cloud revenue grew 33% year-over-year, reaccelerating from the previous quarter and beating both internal targets and Wall Street estimates. “Almost half of that growth came from AI workloads — a level of transparency that reinforced Microsoft’s clout in the enterprise AI stack.”
CEO Satya Nadella and CFO Amy Hood leaned into the idea that “AI and non-AI workloads are increasingly indistinguishable, especially among digital-native customers building everything on unified infrastructure.”
Wedbush called it an “Aaron Judge-like quarter” and raised its price target 8.4% to $515. Microsoft’s $80 billion forecast for fiscal 2025 capital expenditures remains intact, with plans to expand further in 2026 — “quieting any talk of a slowdown in data center investment.”
“In a week where every tech CEO had to tell an AI story, Microsoft made its pitch look not just polished, but inevitable.”
Amazon’s Strength Obscured by Complexity
Amazon’s first-quarter results were strong by the numbers: “Revenue rose 9% to $155.7 billion, net income rose to $1.59 per share, and operating margins hit a record 11.8%, largely on the back of AWS, Amazon’s profit engine.”
CEO Andy Jassy emphasized Amazon’s ability to thrive even in a softening economy, pointing to consumer demand strength, faster Prime delivery, and $500 million in customer savings during global sales events. He described AWS as a “multi-hundred-billion-dollar” opportunity.
Still, “the cloud business grew just 17% year-over-year — solid, especially off a large base, but slower than Azure’s 33%, and short of the expectations that Microsoft’s blowout quarter had quietly raised.”
Analysts flagged uncertainty around near-term earnings power and potential tariff impacts. As Deutsche Bank (DB) put it, “Amazon’s sheer scale helps it weather global disruption — but that same sprawl can make it tough to gauge momentum or profitability with precision.”
“AWS remains the largest cloud provider — a position it’s held for over a decade, a default authority — and management cited capacity constraints as a limiting factor.”
The Broader Picture: Cloud and AI as the Gold Rush
With almost $10 trillion in combined market cap across Microsoft (MSFT), Amazon (AMZN), Apple (AAPL), and Meta (META), last week’s Big Tech earnings weren’t just dry corporate updates. “They were market-moving events.”
Despite a few wobbles, “the takeaway is clear: AI momentum and operational efficiency are driving a new wave of tech profitability, even as tariffs loom and economic uncertainty lingers.”
“Perhaps unsurprisingly, given the widening gap between Wall Street and Main Street, the shift to AI-powered enterprise is shaping up as the gold rush of this decade.”
Microsoft didn’t just post strong results — “it articulated a confident, forward-looking vision of how AI is already translating into revenue.”
Meanwhile, “Amazon remains a catch-all for tech’s most ambitious threads — which may make its story harder to parse for investors.”
A Race With Room for Multiple Winners
Certainly, the stakes couldn’t be higher. “As Jassy noted, we’re still in the early innings of enterprise’s move to the cloud — and that migration is accelerating, powered by AI.”
While Microsoft appears to have grabbed the narrative spotlight, “this isn’t a zero-sum game: The enterprise AI market is big enough to crown multiple winners, and both Microsoft and Amazon will undoubtedly be among the biggest.”
But right now, “in a moment where narrative clarity matters, Microsoft pulled ahead.”
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