U.S. stocks ended yesterday’s session at their highest levels in history. The S&P 500 rose by 0.8%, while the Nasdaq 100 gained 1.3%. Sentiment was supported by the continued ceasefire between the United States and Iran, as well as falling oil prices.
Beneath the surface of the rally, however, increasingly clear differences are emerging among technology leaders. Amazon and Alphabet reached all-time highs, while Microsoft and Meta remain significantly below their records. This shows that investors are no longer buying the entire AI trend indiscriminately. Instead, they are paying much closer attention to which companies can quickly monetise massive spending on artificial intelligence.
Today’s technology bull market on Wall Street has two faces. While Amazon and Alphabet set new records, at USD 274.99 and USD 398.04 respectively, Microsoft and Meta remain in a defensive position, trading more than 20% below their 2025 peaks.
This divergence highlights a shift in the market’s approach to the largest technology companies. Simply being part of the artificial intelligence race is no longer enough. Investors are increasingly asking which firms can turn huge capital expenditure into revenue, margins and lasting competitive advantage.
This move fits into a broader market picture. AI is no longer only a promise of future revenue growth. It has also become a very real investment bill that the largest technology companies are already including in their plans. The biggest U.S. technology firms plan combined capital expenditure in 2026 of as much as USD 725 billion. Most of this capital is being directed towards AI infrastructure and data centres.
Rising costs of chips and memory, together with higher spending on data centres, are increasing investment pressure. Meta raised its 2026 capital expenditure forecast to a range of USD 125 billion to USD 145 billion, around 7.4% above its January assumptions. Microsoft presented initial estimates of around USD 190 billion, close to Alphabet’s level. Amazon is maintaining its forecast at around USD 200 billion, although it already reported higher spending in the most recent quarter.
Operationally, all four companies are showing strong results and are meeting or exceeding expectations. Market reactions, however, are not the same. Amazon and Alphabet are being received more positively, as reflected in their record share prices. Microsoft and Meta are being assessed more cautiously, even though both remain at the centre of the technology race.
The reason lies in their business models and in how the market evaluates the path to monetising AI-related spending. Amazon and Microsoft can monetise investments directly through cloud services. In Amazon’s case, the market appears to believe that AI spending may translate into value growth more quickly. Alphabet has a clear path through Google Cloud. Meta faces a more difficult task, because the potential return on its AI spending is less direct and less predictable.
The differences are also visible in valuations. The forward P/E ratios for these four major technology companies range from 18.5 to 34.6, with an average of around 26.9. Meta, with a ratio of 18.5, is the cheapest company in this group. Amazon is at the opposite end and is valued almost twice as highly as Meta. Alphabet is valued around 70% higher, and even Microsoft trades at a higher valuation than Meta.
The profitability comparison is also interesting. Average margins over the last twelve months range from 11.5% to 46.8%, with an average of around 33.1%. Meta achieves a margin of 41.2%, around eight percentage points above the average. Its margin is approximately 3.6 times higher than Amazon’s and about 8.5 percentage points higher than Alphabet’s. This shows that Meta’s core business remains highly efficient.
That is precisely why the current situation is so interesting. Meta is trading at a significantly lower forward P/E ratio while achieving one of the highest margins. The market is therefore pricing not so much current profitability as uncertainty over future returns on investment. In the case of Amazon and Alphabet, investors see a more direct path to monetisation, which is why these companies have reached record levels.
Yesterday’s Wall Street records show that investors still believe in the strength of technology and the continued development of artificial intelligence. At the same time, the performance of individual market leaders shows that capital is becoming more selective.
Amazon and Alphabet are setting records, while Microsoft and Meta remain below their peaks. The key difference today is not simply participation in the AI race, but the ability to show when and how massive investment will begin to feed through into results. In the next phase of the technology bull market, greater selectivity will be needed. The market may continue to reward companies linked to AI, but the differences between them will become increasingly important.
