Smart Money Flocks to Tech Giants on Cloud Acceleration
Three tech giants - Microsoft (MSFT), Alphabet (GOOGL), and Amazon (AMZN) - are attracting significant institutional investment, according to recent data.
Institutional ownership of these companies is high: 76% for MSFT, 81% for GOOGL, and 69% for AMZN. This trend suggests that smart money is accumulating in these names.
Microsoft's Q4 report showed commercial remaining performance obligations grew 84% to $678 billion, with Azure crossing $100 billion in annual revenue, up 41%. The company's backlog provides a clear indication of future growth potential.
Alphabet also reported strong results, with Google Cloud revenue accelerating to $24.77 billion, up 82% year-over-year. Total Q2 revenue grew 24.2%, and operating income rose 30% as the operating margin expanded to 34%. CEO Sundar Pichai highlighted that nearly 90% of Fortune 100 companies now use Gemini Enterprise.
Amazon's AWS division showed its fastest growth in 18 quarters at 37%, backed by a $496 billion backlog. The company is investing heavily in capex, with free cash flow turning negative due to the significant expenditures.