Amazon surges 15%, MS market cap increases by $450 billion...AI investment validation passed in tandem

▲ Amazon (AMZN), Microsoft (MSFT), Artificial Intelligence (AI)/AI Generated Image

Amazon (AMZN) and Microsoft (MSFT) have passed Wall Street's AI investment validation. By linking large-scale expenditures to actual revenue and user growth, the winners and losers of the Magnificent Seven have begun to diverge.

According to Stocktwits on August 4 (local time), Amazon's stock price surged over 15% last Friday, marking its largest single-day gain since 2012. Microsoft also achieved its best weekly performance since 1999. Sara Araghi, a portfolio manager at Franklin Equity, stated, “Differentiation will begin to emerge within the Magnificent Seven,” adding, “Some companies are winning, and some companies are losing.”

Amazon Web Services (AWS) revenue surged 37% year-over-year to $42.2 billion, its fastest growth rate since 2021. Operating income reached $16.6 billion, with annualized revenue totaling $169 billion. Amazon raised its 2026 capital expenditure forecast from $200 billion to $220 billion.

Amazon CEO Andy Jassy stated that the profitability of its AI business is slightly ahead of AWS's core business at the same growth stage. He predicted that demand would outpace supply until 2027. Jassy added, “The demand already secured for 2028 is also astonishing.”

Microsoft's cloud service Azure's growth rate increased to approximately 43%. Paid Microsoft 365 Copilot users doubled from the previous quarter, reaching about 30 million. Its stock price surged 15%, and its market capitalization increased by approximately $450 billion in one day and over $600 billion in one week. Araghi commented, “Revenue growth is accelerating, and the scale of product adoption is measurable.”

In contrast, Meta Platforms (META) saw its revenue increase by 28%, but its stock fell by 8% due to the burden of its capital expenditure forecast, which could reach up to $145 billion. Apple (AAPL) dropped 7.5% amid sluggish earnings forecasts and supply constraints for AI memory and semiconductors, with over $350 billion in market capitalization evaporating. Alphabet (GOOG·GOOGL) initially plunged 7% after its earnings release but recovered most of its losses after Amazon's AI investment performance was revealed. Morningstar analyst Malik Ahmed Khan noted that Jassy “convincingly presented the return on investment for AI data centers.”

[Article Summary]

-Amazon's AWS revenue grew 37% to $42.2 billion, its fastest growth since 2021.

-Microsoft's paid Copilot users doubled to approximately 30 million, and its market capitalization increased by about $450 billion in one day.

-Wall Street has begun to distinguish between companies that have proven their AI investment performance with numbers and those that have only increased their capital expenditure burden.

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