Amazon, Meta, and Microsoft stocks surge as AI hyperscalers post strong earnings results

Hyperscaler stocks surged on Monday as Microsoft and Amazon posted strong earnings, with Amazon's market capitalization surpassing $3 trillion for the first time and Microsoft's Azure business topping $100 billion in annual sales. Microsoft and Amazon each climbed more than 5%, while Meta rose over 7%, Oracle jumped 6%, and Alphabet gained over 5%. Microsoft reported record cloud revenue with Azure growing 43% in Q4, and Amazon said its AI and chip businesses now have annual revenue run rates of $25 billion.

Hyperscaler stocks rose on Monday as positive earnings results from Microsoft MSFT https://finance.yahoo.com/quote/MSFT/ and Amazon AMZN https://finance.yahoo.com/quote/AMZN/ last week buoyed investor confidence in the artificial intelligence leaders. Microsoft and Amazon climbed more than 5%, while Oracle ORCL https://finance.yahoo.com/quote/ORCL/ jumped 6%, Meta META https://finance.yahoo.com/quote/META/ rose more than 7%, and Google GOOG https://finance.yahoo.com/quote/GOOG/ , GOOGL https://finance.yahoo.com/quote/GOOGL/ was up more than 5%. Amazon's stock moves helped push the company's market capitalization past the $3 trillion mark for the first time. Meta, meanwhile, recovered all of its losses after posting second quarter earnings last week that fell flat. Microsoft's and Amazon's results, however, told a different story. Microsoft said it saw record cloud revenue, https://finance.yahoo.com/technology/article/microsofts-stock-rockets-more-than-15-for-largest-single-day-jump-in-history-120144134.html with its Azure business topping $100 billion in annual sales for the first time. Azure revenue grew 43% during the company's fourth quarter https://finance.yahoo.com/news/amazon-stock-soars-after-q2-earnings-beat-expectations-as-ai-chip-businesses-see-25-billion-run-rate-115622323.html , and leadership said it anticipates further acceleration in Q1. The announcements provided breathing room for hyperscalers, which have faced ongoing questions about their prodigious spending on AI data centers and chips and when they'll see healthy returns on those investments. The company said it is also revamping its capital expenditures by increasing the useful life of its data centers and officers. CFO Amy Hood said that will move future data center leases from finance leases to operating leases, which aren't included in capital expenditures. Amazon, meanwhile, said during its Q2 earnings call that both its AI and chip businesses now have annual revenue run rates of $25 billion. AWS growth hit 36.7% in the quarter, its fastest in 18 quarters, CEO Andy Jassy said in a statement. Google parent Alphabet's stock has also recovered from its losses following its earnings report late last month https://finance.yahoo.com/technology/article/google-falls-more-than-6-on-capex-growth-expectations-despite-earnings-beat-202407124.html , in which it said it will increase its capital expenditures for the year to between $195 billion and $205 billion, up from previous estimates of $180 billion to $190 billion. Analysts had been anticipating $186.4 billion in capital expenditures. Meta's mixed results last week https://finance.yahoo.com/news/meta-misses-on-q2-earnings-stock-tumbles-121325403.html sent the company's stock sinking about 9%. The social media giant missed earnings estimates due to spending on legal contingencies and severance payments but beat on advertising revenue. Still, third quarter guidance came up short of Wall Street's anticipated midpoint, and Meta lifted the lower end of its capex expectations, shaking investors' confidence. Monday's early trading provided a small reprieve for Oracle, which has fallen more than 7% since reporting earnings in early June https://finance.yahoo.com/sectors/technology/article/oracle-q4-earnings-beat-on-revenue-but-miss-on-cloud-sales-221337908.html that fell short of analysts' projections on cloud sales.