Jim Cramer · Microsoft · Wall Street · Copilot · CNBC Technology
Jim Cramer confirms Microsoft is winning the AI spending battle, and Alphabet is paying the price
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CNBC's Jim Cramer said Thursday that the market's reaction to Microsoft and Alphabet's latest earnings underscores a major shift in how Wall Street evaluates the enormous costs of the artificial intelligence boom.
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- The company expects capital expenditures of $195 billion to $205 billion this year, while free cash flow turned negative for the second consecutive quarter
- Capital expenditures and finance leases of $45.2 billion also came in below Wall Street's forecasts
- He also warned that Alphabet's remaining $27.6 billion in authorized stock sales could weigh on shares
Summary
Investors who once rewarded tech giants for aggressively building AI infrastructure are now prioritizing financial discipline and returns on those investments. But Cramer said the companies' earnings Wednesday night showed how dramatically investors' priorities have changed. On Wednesday night, Microsoft topped earnings and revenue expectations, with revenue for its Azure cloud business growing 48% from a year earlier.