AI Earnings Season Winners and Losses: Microsoft and SK Hynix Shine, Amazon and Meta Face Spending Doubts

Third-quarter earnings have delivered a mixed verdict on the AI trade, with Microsoft and SK Hynix emerging as clear winners while Amazon, Alphabet, Meta, Tesla, and Caterpillar faced investor skepticism over heavy spending. The tech-heavy Nasdaq 100 remains about 6% off its highs, down 1.4% since earnings season began. Microsoft impressed with 48% Azure sales growth and lower-than-expected capital expenditures, while SK Hynix posted record profits and locked in long-term AI-memory deals. Conversely, Amazon's $77 billion in property spending led to negative free cash flow, and Alphabet missed on sales, EPS, and search, despite strong Google Cloud growth. Meta's AI-driven ad improvements were overshadowed by nearly $35 billion in quarterly capex, and Tesla's earnings beat was undercut by a reduced 2026 spending forecast. Intel's strong data-center growth was offset by a weak fourth-quarter outlook, while Caterpillar's power-generation business failed to reassure investors.