This article first appeared on GuruFocus.
The AI boom is still powering big tech, but investors are no longer cheering everyone equally, and this earnings season is making that divide pretty clear.
Alphabet (NASDAQ:GOOG) is one of the biggest winners right now. The stock jumped 10% last week after strong growth in Google Cloud and its AI businesses, and it is now up 23% in 2026, leading the pack among mega cap names. Meta (NASDAQ:META), on the other hand, is seeing the opposite reaction.
Even with solid results, shares fell more than 8% as investors focused on rising AI spending and heavier use of debt, leaving the stock down nearly 8% this year. Microsoft (NASDAQ:MSFT) is also under pressure, with shares down 14% in 2026 after warning of massive capital spending ahead, which ended up overshadowing solid Azure momentum.
Zooming out, the earnings backdrop is still strong. The Magnificent Seven, excluding Nvidia (NASDAQ:NVDA), are tracking toward 57% profit growth for the first quarter, well ahead of the broader market. Apple (NASDAQ:AAPL) moved higher after guiding to stronger revenue, while Amazon (NASDAQ:AMZN) hit a record high on its fastest cloud growth in more than 3 years.
Chip stocks are also riding the wave, with the SOX index up 50% this year, although Nvidia has started to show some cracks as companies like Alphabet, Amazon and Qualcomm (NASDAQ:QCOM) push their own in house chips.
