Investors Are Worried About Too Much AI Spending. They're Not Wrong, But It's Paying Off for These 2 Tech Stocks.
2026-10-25 17:43
•Chris Neiger •The Motley Fool
•••••• ••• Axe Cap view
AI Spending: Winners Emerge Amid Investor Doubts
Microsoft and Amazon’s AI-driven cloud growth merits a closer look despite market concerns over excess investment.
Many investors grumble that tech giants are pouring too much cash into AI. Yet, Microsoft and Amazon confidently prove that massive spending can translate into solid returns. Amazon’s AWS, with $169 billion annual revenue and near 40% margins, is not just a hype machine; it’s booking real profits and growing fast. Microsoft’s Azure, growing 41% year-on-year, combines cloud muscle with its unique Copilot AI software, positioning it to outpace competitors. For South Africans, the immediate takeaway isn’t just these US stocks but USD/ZAR moves too — a stronger dollar often pressures our rand, impacting exporters and importers alike. While the AI race may look frothy in smaller players, these tech titans show disciplined, profitable growth. Still, a tech market correction or slowing enterprise spending could stall this momentum. this is just our opinion and not financial advice
Buy Microsoft and Amazon selectively to capture AI-driven cloud growth, while monitoring USD/ZAR for currency risks. Avoid speculative AI plays that lack earnings traction.
- MSFT
- AMZN
- USD/ZAR
- US tech market correction
- enterprise IT spending slowdown
7/10
While investors worry about excessive AI spending across the tech industry, Microsoft and Amazon are demonstrating tangible returns on their massive capital expenditures through their cloud services. AWS and Azure are experiencing strong revenue growth and profitability, with AWS at $169 billion annualized revenue and Azure at $100 billion. Microsoft is highlighted as having additional growth potential through its Copilot AI software ecosystem integrated with Azure.
Our take is based on reporting first published by The Motley Fool.