Alphabet, Microsoft, Amazon, and Oracle Just Gained $1.9 Trillion in 3 Days. Here's Why Microsoft's Run Isn't Over.

1 hour ago 2

Daniel Foelber, The Motley Fool

Wed, August 5, 2026 astatine 12:40 PM CDT 6 min read

Alphabet (NASDAQ: GOOG) (NASDAQ: GOOGL) reported net connected July 22. The adjacent day, the banal closed down 7.1% successful effect to higher superior expenditure (capex) guidance and fears of borderline compression and little escaped currency travel (FCF). As of the July 23 marketplace close, unreality computing giants Alphabet, Microsoft (NASDAQ: MSFT), Amazon (NASDAQ: AMZN), and Oracle (NYSE: ORCL) were each severely underperforming the large indexes twelvemonth to date, with Alphabet and Amazon up a small implicit 1%, Microsoft down 21.1%, and Oracle down 38.4%.

A batch has changed since. As of marketplace adjacent connected Aug. 3, Amazon is present up 23% twelvemonth to date, Alphabet is up 19.3%, Microsoft has recovered each of its losses and is up 0.8%, and Oracle is clawing backmost with a 27.2% year-to-date decline.

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Here's wherefore capitalist sentiment has shifted, and wherefore Microsoft is the champion unreality banal to bargain successful August.

Justifying grounds capex

In conscionable 3 marketplace sessions, from July 29 adjacent to Aug. 3 close, these 4 unreality computing giants gained a combined mind-numbing $1.857 trillion successful marketplace headdress -- which is similar creating a institution arsenic invaluable arsenic Broadcom retired of bladed air.

Microsoft added a staggering $720 cardinal -- adjacent much than Amazon.

Data source: YCharts.

The glass-half-empty outlook connected Microsoft, and to a akin grade Oracle, is that artificial quality (AI) is disrupting bequest bundle tools and that their unreality computing spending volition instrumentality a portion to wage off, thereby taking a sledgehammer to FCF successful the adjacent term. Oracle is an utmost illustration of betting large connected cloud. Spending connected its database build-out acold exceeds currency flows from the database and information absorption bundle segments. So, successful summation to being FCF negative, Oracle has taken connected sizeable debt.

In comparison, Alphabet, Microsoft, and Amazon were initially capable to sorb higher spending successful the earlier stages of the AI information halfway build-out. But they person continued to summation their capex spending and guidance 4th aft quarter. So investors got spooked erstwhile Alphabet raised its full-year capex guidance to a caller scope of $195 cardinal to $205 billion, rivaling Amazon's. This is particularly antithetic considering that Alphabet's quarterly FCF turned antagonistic for the archetypal clip successful implicit a decade.

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