AI Spending Spree: Microsoft and Amazon Soar Despite Investor Concerns

Both Microsoft and Amazon have been making significant investments in artificial intelligence infrastructure, raising concerns among investors about their high capital expenditures.

Despite this, both companies have reported strong earnings and seen rapid growth in their cloud divisions. Microsoft's Azure cloud division saw revenue surpass $100 billion for the first time, a 43% year-over-year increase.

Wall Street analysts are bullish on both stocks, with over 90% of them having buy ratings. The average price target implies nearly 21% upside for Microsoft and roughly 23% for Amazon.