Tech Earnings Reveal Widening Divide in Artificial Intelligence Race

Big Tech earnings have highlighted a widening divide in the artificial intelligence (AI) race. Major technology companies reported strong results, raised infrastructure plans, and provided new insights into growing demand for AI computing power, cloud services, and advanced semiconductors.

Apple's stock fell 7% last week after the company issued a softer sales outlook due to rising memory chip prices. Apple expects revenue to rise 9-11%, below Wall Street's forecast of about 12% growth. The surge in DRAM costs has created a '100-year flood on memory pricing', according to CEO Tim Cook.

Cloud giants Amazon and Microsoft posted strong results driven by rising demand for cloud computing and AI services. Amazon Web Services (AWS) revenue jumped 37% to $42.2 billion, while Azure growth increased 43%. Amazon raised its 2026 capital spending forecast by $20 billion to $220 billion.

META Platforms stock clocked over a 6% weekly decline as investors questioned the company's AI spending strategy and slower-than-expected outlook. Despite strong second-quarter results, Meta is exploring ways to monetize its massive AI infrastructure investments by potentially selling computing capacity to outside customers.