Big Tech’s Tab Is Running Up – But Who Is Profiting?

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For the past few years, Big Tech has been ordering everything on the AI menu: more chips, more data centers, more power, more servers and more advanced models.

These firms are pouring hundreds of billions of dollars into the infrastructure needed to power artificial intelligence. It’s the largest corporate spending spree in history.

Last year alone, roughly $450 billion went toward AI infrastructure and data-center expansion. This year, that figure could climb to somewhere between $700 billion and $900 billion.

And by the time the buildout is complete, some estimates suggest the total tab could approach $5 trillion.

For the past few quarters, Wall Street has been asking one question: How big is the AI tab?

But after all that spending, investors are starting to ask a second question: Where is the receipt?

In other words, what is all this money actually producing? Investors want proof that those billions are translating into faster growth, stronger demand, new customers and future revenue.

And this week’s Big Tech earnings are showing what happens when a company can provide that proof – and what happens when it cannot.

In today’s Market 360, I’ll examine the enormous AI tabs being run up by four of the world’s biggest technology companies and show you which ones gave Wall Street the receipts it wanted. Then, I’ll explain why Big Tech may not be the only place investors should look for the next major winners of the AI spending boom.

Microsoft Shows Wall Street the Receipt

Microsoft Corp. (MSFT) gave Wall Street exactly what it wanted after the closing bell on Wednesday.

For its fiscal fourth quarter, Microsoft reported revenue of $90 billion, a nearly 18% increase from a year ago and well ahead of estimates for $87.62 billion. Earnings came in at $4.81 per share, topping expectations for $4.24.

The strength was concentrated in the businesses most closely tied to the AI buildout. Intelligent Cloud revenue rose sharply, while Azure – Microsoft’s cloud-computing platform, which allows businesses to rent computing power, storage and AI services – grew 43%.

Microsoft also said Microsoft 365 Copilot now has more than 30 million paid seats, and Azure’s annual revenue has climbed above $100 billion.

Microsoft spent about $41 billion on capital expenditures during the quarter. But its commercial remaining performance obligations – essentially its backlog of contracted business that has not yet been recognized as revenue – climbed to $678 billion.

Management expects Azure growth to accelerate to about 45% in the current quarter.

That was a convincing receipt. Microsoft shares surged about 15% on Thursday as investors concluded that demand for the company’s cloud and AI services justified the enormous spending.

Meta Asks Investors to Keep Waiting

Meta Platforms, Inc. (META) delivered a far different result on Wednesday.

Second-quarter revenue rose 28% year-over-year to $60.8 billion, slightly above estimates for $60.22 billion. But earnings declined 14% to $15.85 billion, or $6.18 per share. Analysts were expecting $7.19.

Meta’s core business remains very healthy. Advertising revenue increased 27% to $59.36 billion. But Meta spent about $31.1 billion during the quarter as it continued building AI infrastructure. Free cash flow plunged to just $784 million, down from $8.55 billion a year ago.

The company also raised its full-year capital spending outlook to $130 billion to $145 billion and guided for third-quarter revenue of $61 billion to $64 billion, slightly below Wall Street’s expectations.

Meta shares fell nearly 10% after the report.

That does not mean Meta’s investments will not pay off. Its AI tools are already improving ad performance and engagement. And Mark Zuckerberg has teased the idea of renting out Meta’s excess compute capacity to other firms, which would help bring in more revenue.

But Wall Street is becoming less willing to accept an open-ended promise when the bill is immediate and the cash-flow payoff remains uncertain.

Amazon Turns the Buildout Into a Business

On Thursday, Amazon.com, Inc. (AMZN) showed investors another way to justify the AI tab.

Second-quarter revenue increased 20% year-over-year to $200.6 billion, comfortably above estimates for $196.4 billion. Operating income climbed to $27.5 billion.

The real star was Amazon Web Services, or AWS. This is Amazon’s cloud computing division, which rents computing power, data storage and AI services to businesses.

AWS revenue surged 36.7% to $42.2 billion, its fastest growth rate in 18 quarters. Its backlog reached about $496 billion.

Amazon also said both its AI business and custom-chip business have surpassed annual revenue run rates of $25 billion. Advertising remained another source of high-margin growth, while the company’s retail operations continued producing stronger profits.

Amazon now expects to spend about $220 billion this year, up $20 billion from its previous outlook, with much of that increase tied to data centers, chips and higher memory costs. The company guided for third-quarter revenue of $197 billion to $202 billion and operating income of $22.5 billion to $26.5 billion.

Amazon shares jumped more than 15% on Friday following the announcement.

The key part that investors seem to like is that Amazon is not simply buying AI infrastructure. It is renting that infrastructure to the rest of the economy and designing the chips that help power it.

In other words, Amazon is not just ordering from the AI menu. Through AWS, it owns part of the kitchen.

Apple Is Paying for Someone Else’s Order

Apple Inc. (AAPL) is the outlier in this group. For the better part of two years, investors had questioned the company’s lack of investment in the AI space. And for a while, delays in a revamped, AI-powered Siri had investors growing frustrated.

But as investors began to sour on names with large AI tabs, the stock took off and briefly closed with a market cap above $5 trillion.

Unfortunately for Apple, though, while it isn’t spending on AI data centers, it is still paying part of the industry’s bill.

For its fiscal third quarter, Apple reported revenue of $109.42 billion, up 16% year-over-year and slightly ahead of estimates. Earnings increased 27% to $29.79 billion, or $2.02 per share, topping expectations for $1.89 per share.

iPhone revenue jumped 22% to $54.25 billion, while Services revenue reached $30.74 billion – falling short of Wall Street’s estimates of around $31.4 billion.

Management also warned that surging demand for memory and advanced chips is driving up costs and tightening supply. Apple recently raised prices on some Macs and iPads, but those increases will not fully offset the pressure.

The company expects fourth-quarter revenue growth of only 9% to 11%. Investors sent the stock down sharply in after-hours trading after the report on Thursday. The stock ended up down more than 7% on Friday.

Now, Apple is also working to make its increasingly expensive products easier to afford through a new arrangement with Klarna (a buy-now, pay-later firm). Meanwhile, a foldable iPhone is reportedly expected later this year, with AI-powered glasses potentially following next year.

Those premium products could help drive Apple’s next growth cycle. But for now, the AI boom is raising Apple’s costs before it generates a meaningful new revenue stream.

Wall Street’s New Rule

These four reports reveal the market’s new rule.

The first phase of the AI boom rewarded ambition. Announce another data center, another chip order or another multibillion-dollar investment, and investors generally applauded.

That period is ending.

Wall Street is no longer rewarding companies simply for spending heavily on AI. It wants contracted demand, rising utilization, faster revenue growth, stronger margins and, eventually, free cash flow.

But not every receipt created by this spending boom will appear on the income statements of the companies writing the checks.

Big Tech is financing the chips, cloud capacity, data centers, power systems and foundational models. Entrepreneurs are using that infrastructure to build software, robotics systems, healthcare applications and other businesses that would not have been economically possible just a few years ago.

And here’s the thing…

These tech giants do not have unlimited time.

So when a smaller company has already developed the people, intellectual property and product it needs, it can be faster to partner with it, invest in it or buy it than to recreate the technology internally.

Of course, not every private AI company will succeed. Many will fail, and others may remain illiquid for years.

The opportunity lies in identifying the relatively small group with capable leadership, differentiated technology and a market large enough to support serious growth.

Finding the Winners Before Wall Street Does

That requires a different kind of research.

I have spent my career studying public companies, where quarterly earnings, analyst estimates and institutional buying pressure provide a steady stream of evidence. Private technology companies are different.

That is why I turn to my colleague Luke Lango.

Luke has spent years studying emerging technologies and the younger companies working to commercialize them. While I focus on finding superior growth stocks in the public market, Luke specializes in a part of the AI economy that most individual investors rarely see.

That’s why he just hosted The 2026 AI Megadeal Event earlier this week.

In it, he explained why he believes the next phase of the AI boom could create major opportunities outside the public stock market. He also showed the framework he uses to evaluate these companies and reveal one specific opportunity he believes illustrates the trend.

Click here to watch the replay now.

Sincerely,

Louis Navellier

Editor, Market 360