AI Dividends Arrive: Big Tech’s Earnings Surge Shows Power of Scale and Strategy

Meta, Microsoft, Apple, and Amazon deliver robust earnings, reinforcing their central role in markets—and highlighting their intensifying commitment to AI infrastructure.

The Magnificent Seven are proving their name still fits. This week, a series of blockbuster earnings reports from four of Big Tech’s biggest players—Meta, Microsoft, Amazon, and Apple—demonstrated that their aggressive bets on artificial intelligence are beginning to pay real dividends.

Across the board, these firms exceeded Wall Street expectations on both revenue and profit, validating the scale and capital intensity of their strategies. The results confirm a broader theme unfolding in global markets: Big Tech is not only weathering the AI transition, it is leading and defining it.

Profits Surge, Capital Commitments Follow

Each company posted a strong financial performance for the most recent quarter. Amazon led the revenue table with $167 billion, followed by Apple at $94 billion, Microsoft at $76 billion, and Meta at $47.5 billion. But profits were equally impressive. Meta’s net income surged 36% year-on-year, while Microsoft delivered a staggering $27 billion in net income—testament to its increasingly dominant position in AI-driven cloud computing.

These earnings reinforce the positioning of these tech giants as foundational components of global equity markets. Together, Microsoft, Apple, Amazon, and Meta now account for roughly 20% of the S&P 500, with Microsoft’s market capitalisation alone climbing above $4 trillion this week. Add Nvidia and Alphabet, and the weighting of a handful of firms becomes even more pronounced—raising questions about concentration risk even as investors remain bullish.

Research Affiliates chairman Rob Arnott described the current valuations to the Financial Times as pricing in “a future without competition.” Whether or not that proves accurate, it is clear that no other companies can currently match the spending power or network effects these firms enjoy.

AI at the Core: From Infrastructure to Monetisation

What’s driving this momentum? In a word: AI. Having laid the groundwork over several years, these firms are now investing at unprecedented levels in data centres, chips, and software infrastructure to support AI deployment across both consumer and enterprise markets.

Microsoft is set to spend a record $30 billion in the current quarter alone—its largest ever capex allocation—to expand AI-focused data centre capacity, especially for its Azure cloud platform. Azure generated $75 billion in revenue for Microsoft in its fiscal 2025 year and is now a primary delivery channel for AI compute. Even amid shifting dynamics in its relationship with OpenAI, Microsoft remains firmly embedded in the AI stack.

Meta, which relies on Microsoft’s Azure infrastructure, has also raised its 2025 capital expenditure guidance to as much as $72 billion, citing ongoing investment in its AI capabilities. While its Reality Labs division continues to burn cash, the core advertising business—still nearly 98% of total revenue—is being buoyed by AI-enhanced targeting and personalisation tools.

Amazon saw its capital expenditures exceed $30 billion last quarter, as the company continues to scale its AWS offering and AI development. AWS remains a powerful profit engine, and Amazon is clearly preparing for a future where AI workloads dominate cloud demand.

Apple, meanwhile, may have delivered the most surprising result—not for its size, but for its resilience. Despite concerns over its lag in the AI race and vulnerability to supply chain tensions with China, the company’s quarterly sales outperformed expectations. Pre-emptive consumer purchases, spurred by fears of incoming US tariffs, boosted demand. Meanwhile, Apple’s shift to Indian manufacturing has helped diversify its supply base. India is now the largest source of iPhones shipped to the US, and while the White House has imposed a 25% tariff on many Indian goods, smartphones have so far avoided the penalty.

Apple has lost several senior AI team members in recent months, with some joining Meta’s AI Superintelligence unit. Yet the company’s device ecosystem and global brand power continue to shield it from more severe market punishment. Investors are betting that Apple, as it has done before, will arrive late to the AI race—but on its own terms.

Concentration, Competition, and Conviction

Beyond the impressive headline numbers, these earnings reports reinforce a strategic divergence between Big Tech and the rest of the market. These firms are not waiting for AI to become mainstream—they are building the mainstream. Their combined capital expenditures, which may exceed $150 billion this year, are reshaping global data infrastructure.

Their scale gives them more than operational efficiency—it grants them the ability to make long-term investments few others can match. While smaller firms may innovate at the margins, Big Tech is laying the rails for AI’s mass adoption, creating formidable moats around their businesses in the process.

Critics may point to valuation risks, antitrust exposure, and geopolitical tensions as potential headwinds. But for now, investors appear to be leaning into the growth story. With structurally embedded platforms, access to elite talent, and first-mover advantage in AI infrastructure, the Magnificent Seven—at least the four in focus this week—remain dominant.

The Earnings Echo

The latest earnings season offers a clear signal: the AI future is no longer theoretical. It is monetising, maturing, and materialising across multiple business lines.

For investors, the implications are significant. Big Tech is no longer simply a tech sector play; it is the engine of broader market performance, a structural pillar of global portfolios, and an increasingly central force in the AI economy.

Whether or not competition eventually catches up, for now the race is not close. The world’s biggest technology firms are accelerating into the AI era—with deep pockets, bullish forecasts, and quarter after quarter of outperformance to show for it.