Big Tech Q&A: What are investors asking after earnings release?

After another round of excellent results from tech giants, the same two questions are again resonating in portfolios:

• Those who rode the wave of growth since the beginning of 2023, They have solid profits and are wondering if it's time to cash in on them.
• Those who are still on the sidelines are feeling FOMO and wondering if the best moment to get in has already passed them by.

Both dilemmas are perfectly legitimate. The AI ​​boom has propelled the so-called "Magnificent Seven" to new heights, but beneath the surface, their paths have begun to diverge: there are companies that are already monetizing AI, and others that are still investing with an eye on the future.

In this Q&A, we break down what actually changed after the earnings results, what the market has already priced in, and how investors can approach reducing, rotating, or maintaining positions as Big Tech enters its next phase.

Q: All five giants beat expectations, so why did the market react so differently?

Because numbers alone only tell part of the story. While all five companies—Microsoft, Amazon, Google, Apple, and Meta—have benefited from the AI ​​push, they are at very different stages of turning that excitement into real profits.

Some are already generating significant cash flow from AI-related activities, while others are still scaling or face high infrastructure costs.

• Microsoft i Amazon deliver growth in cloud and AI services, backed by real cash flows.
• Alphabet (Google) AI implementation translates into acquiring new customers, but only then does it scale profitability.
• Meta is investing heavily in building computing power for AI, which is putting a strain on its short-term cash flow.
• Apple  still delivers stable, consistent growth driven by its services segment, but its AI strategy is intentionally slower and more limited.

This divergence is healthy: Big Tech is no longer a single investment theme, but a collection of distinct investment stories. This allows investors to finally be selective, trimming exposure where valuations are already stretched and adding where predictability increases.

Q: What exactly is an “AI backlog” and why does it matter?

The AI ​​backlog (RPO—Remaining Performance Obligations) is the value of cloud and AI service contracts that have already been signed but not yet executed. It's a strong indicator of future revenue predictability and shows how much demand is already secured, regardless of short-term market fluctuations.

The growing backlog signals that customers are locking themselves into multi-year contracts for AI and cloud services.

Microsoft's deployments among enterprise customers are accelerating, while Google's steady growth reflects new computational tasks related to AI model training and data analytics. Amazon's backlog growth, while more moderate, underscores the depth of its customer base and its strong propensity for contract renewals.

For long-term investors, the backlog matters more than quarterly forecast “beats,” he says, who have future growth largely already assured.

Q: Who spends the most on AI infrastructure and how far is the gap?

AI investment has become a capital-intensive race. Here are the latest annual spending plans, based on company guidance and disclosures:

These numbers show how the accents are distributed:

Meta and Alphabet lead in the expenditure cycle., Microsoft and Amazon increase computing power at a pace corresponding to monetization, and Apple  remains disciplined, investing selectively within its own ecosystem

High capital expenditures aren't a red flag in and of themselves, but they do increase volatility. For investors with significant profits, this is more likely a sign to reduce exposure than to change their investment thesis.

Q: Which companies are already monetizing AI and which are still laying the foundations?

While all invest, the financial impact varies greatly. Monetization distinguishes today's cumulative growth from tomorrow's still-potential growth.

The earliest financial benefits are concentrated in two companies: Microsoft i Amazon.

• Microsoft sees Azure revenue accelerating; Copilot integration increases enterprise customer retention, and growing backlog confirms pricing power.
• AWS Amazon remains the most profitable business among the three (Microsoft, Amazon, and Google) and funds broader innovation across the group.
• Google is gaining market share, but profitability still lags behind.
• Meta Investments are ahead of the curve, model training and data center construction are ahead of monetization.
• Apple  monetizes more indirectly, through ecosystem loyalty and higher-margin services.

Key difference: Some companies are monetizing AI today, others are building foundations with the future in mind.

Q: How do the cloud businesses of Microsoft, Amazon, and Google really differ?

Each of these companies dominates a different layer of the cloud stack, and understanding these differences helps explain their performance and prospects.

• Microsoft Azure is most deeply embedded in the enterprise ecosystem. It integrates the cloud with Office, GitHub, and AI tools like Copilot. A 40% year-on-year increase and a backlog of $392 billion demonstrate the resilience of enterprise contracts. Azure is where AI meets productivity.
• Amazon Web Services (AWS) remains the leader in scale and profit. With $33 billion in quarterly revenue and $11 billion in operating profit, AWS funds much of Amazon's innovation in other areas. However, its growth is slower (20% year-over-year) as enterprise customers optimize existing workloads before expanding them again.
• Google Cloud is a challenger, growing 34% year-over-year with a $155 billion backlog. It is gaining share among developers and "AInative" companies with its Tensor Processing Units (TPUs) and data analytics tools. Profitability is rapidly improving, which could drive higher valuation multiples.

In our opinion, looking forward, Microsoft will likely offer relatively greater profit predictability, Amazon stronger current profitability, and Google potential increase in valuation.

At the same time, each of these companies has its own execution and cyclical risks that could disrupt these scenarios.

Q: Where are Apple and Meta in this system?

In our view, Apple remains a "quiet manufacturer"—a business that consistently accumulates growth. Services revenue, which has just reached a record, could offset the hardware slowdown. Its ecosystem is a competitive advantage, and its ongoing share repurchase program (over $110 billion in 2024 alone) rewards patience. Implementing AI through "Apple Intelligence" will likely strengthen, rather than disrupt, existing products.

Meta is a different story. It's profitable but entering a demanding, capital-intensive investment cycle. Its AI push into recommendation engines and infrastructure will take time to monetize. Long-term supporters see it as the next stage of digital engagement; skeptics see the risk of overspending.

Both companies offer brand and user base stability, but with different horizons: Apple for consistency, Meta for optionality (a wider range of potential development paths).

Q: Could AI threaten Google's advertising business?

Maybe. Google's AI Overviews, AI-generated summaries of search results, shorten users' paths to answers, reducing the need for further clicking. This could reduce ad impressions and traffic to publishers' websites. For now, Google's advertising revenues are growing, but investors are watching to see if AI will start to cannibalize this crucial "cash generator" that funds future growth.

This risk explains why Alphabet shares, though priced lower, trade at a showme discount, with the market expecting evidence that AI is an addition to the core of the business, not an eroding force.

Q: What are valuations like today?

Valuations reveal a nuanced picture.

• Amazon trades at a significant discount to its five-year average, suggesting its profitability and cash generation capacity may still be undervalued.
• Meta is roughly in line with its historical average, a reasonable valuation if the company manages to maintain profits while investing in AI.
• Microsoft trades at a slight premium reflecting investor confidence in Azure's strategy execution and business predictability.
• A is trading above its average, reflecting expectations of further growth and margin expansion.
• Apple  trades at a premium reflecting the stability and enduring strength of the ecosystem, not expectations of dynamic growth.

In brief: Microsoft i Apple  are valued based on trust; A i Amazon based on potential; Meta with a bit of skepticism.

Q: What are the biggest risks right now?

• Microsoft: limitations in the availability of energy and chips, pressure on margins.
• Amazon: slower pace of growth of the enterprise cloud, price competition.
• Google: risk of search monetization erosion, regulatory pressure.
• Apple : exposure to China, slower product cycle, AI delays.
• Meta: High investment in artificial intelligence, regulatory control

Q: Should I take profits or change positions?

After such significant gains, this is a reasonable question, not a sign of doubt. Below are some points to consider. This information is for general discussion purposes and does not constitute investment advice. Investors should evaluate their own situation or consult a qualified financial advisor.

• If you already have solid profits: You might consider rebalancing your portfolio rather than completely exiting. This could mean reducing exposure to highly valued companies, maintaining key positions where predictability is highest, and shifting some funds to cash or dividend-paying assets to smooth out volatility.
• If you joined late or feel underweight: Short-term pullbacks can be an opportunity, especially where valuations are below historical averages and AI monetization is just starting to ramp up.
• If you have a balanced portfolio: Combining one growth stock with one AI-based growth stock can provide a diversified way to stay relevant without the risk of over-concentration.

The key is position management, not forecasting, by maintaining exposure to the long-term AI blend while managing short-term enthusiasm.

Q: Did I miss the rally?

Much of the easy growth is behind us. The next stage is generating profits, not expanding multiples.

• For those who are late: Entry may not be cheap, but structural forces (AI implementations, cloud growth, energy transition) remain intact. Focus on gradually building positions and accumulating weaknesses, rather than chasing peaks.
• For current owners: Profits can continue to stack up if you have the right segments, e.g., cash flow visibility at Microsoft and Amazon and catch-up potential at Google.
• For cautious investors: Thematic ETFs or baskets of companies provide diversified exposure without the risk of getting the wrong idea about a single company.

Artificial intelligence has shifted from "fear of missing out" to "fear of missing out." Opportunities are still there, but now they reward patience more than speed.

Q: What metrics are worth tracking next quarter?

• Backlog Conversion - what part of the contracted revenues turns into real cash.
• Capex Discipline – whether spending stabilizes as infrastructure scales.
• AI Monetization – Contribution to revenue from Copilot, Vertex AI, and AI workloads on AWS.
• Energy and chip availability – constraints that may delay implementation and deliveries.

These numbers will show who is turning AI from narrative into real, cumulative results.

Q: What does this mean for investors here and now?

Each company plays a different role in a balanced, long-term portfolio.

Final Thought

Big Tech enters the second act of the AI ​​cycle, less hype, more execution.

The easy money from multiple expansion is largely behind us; the next stage belongs to disciplined investors who manage exposure rather than rely solely on conviction.

Fundamentals are diversifying, which is good news for investors who can distinguish between growth that is “paying for itself” and growth that has yet to be confirmed.

Microsoft and Amazon may remain the clearest cash generators; Alphabet and Meta may offer selective opportunities; Apple may continue to act as an anchor of stability.

Whether you are protecting profits or just catching up, the right move is not to allin or allout, but to consciously remain invested in those segments of the tech giants that still have real profit-generating potential ahead of them.

About the Author

Charu Chanana, market strategist in the Singapore branch Saxo Bank. She has over 10 years of experience in financial markets, most recently as Lead Asia Economist in Continuum Economics, where she dealt with macroeconomic analysis of Asian emerging countries, with a focus on India and Southeast Asia. She is adept at analyzing and monitoring the impact of domestic and external macroeconomic shocks on the region. She is cited frequently in newspaper articles and appears regularly on CNBC, Bloomberg TV, Channel News Asia, and Singapore's business radio channels.