A stark divide is emerging in the technology sector as the latest earnings season reveals investors are punishing unchecked spending on artificial intelligence while rewarding companies that prove its profitable application. Nigel Green, chief executive of deVere Group, affirms this marks a turning point in market psychology.
Alphabet and Amazon delivered standout quarters, strengthening their positions as credible AI beneficiaries. Alphabet became the first tech giant to post quarterly revenue above $100 billion, powered by a 34 percent surge in Google Cloud. Amazon reported profit growth of about 40 percent, with its cloud division expanding despite a global outage. Investors sent their shares higher, recognizing their disciplined monetization strategies.
In contrast, Meta and Microsoft faced a sharp market backlash. Meta’s stock dropped more than 10 percent after it announced plans to raise capital spending to as much as $72 billion for AI expansion. Microsoft shares slipped about 3 percent as investors focused on the costs of its OpenAI partnership. Apple produced solid results, though challenges in China remained, while Tesla disappointed with weaker earnings.
Green notes the market is now favoring firms that harness AI profitably today over those spending endlessly for future gains. He says, “Investors are demanding results, not just promises.” This new selectivity signals that extraordinary AI enthusiasm is giving way to a more pragmatic approach where measurable returns are paramount.
