Mag 7 Earnings: GOOGL, MSFT, AMZN, META

The MAG7 tech earnings report delivered a stark divergence in market reactions, with Alphabet (Google) soaring on a dominant quarter fueled by AI-driven growth and record revenue, while Meta, Microsoft, and Amazon faced after-hours declines despite strong financials. Alphabet posted a record $109.9 billion in revenue, beat all estimates, and saw its consumer AI plans (Gemini) grow 40% quarter-over-quarter, with 350 million paid subscriptions. Its $37.7 billion non-operating gain and 5% dividend hike further boosted sentiment. In contrast, Meta’s $10.44 EPS beat was overshadowed by a massive $125–145 billion CapEx forecast—up $10 billion—sparking a 6.5% after-hours drop, as investors questioned monetization of its spending. Microsoft, though beating on EPS, Azure growth, and AI revenue, fell 2.5% amid concerns over muted cloud beat and uncertainty around its OpenAI partnership. Amazon, despite a 28% AWS growth and strong margins, dipped 4% due to high CapEx and a slight miss on physical store sales, with free cash flow falling to $1.2 billion. The episode underscores a growing market shift: investors are no longer rewarding aggressive spending without clear ROI, especially in AI infrastructure, and are demanding tangible monetization over scale alone.