By Daniel Foelber
Publication Date: 2026-05-03 11:00:00
Amazon (AMZN +1.25%) Web Services, Microsoft (MSFT +1.62%) Azure, and Alphabet‘s (GOOG +0.34%) (GOOGL +0.23%) Google Cloud dominate the cloud computing infrastructure market. But artificial intelligence (AI) marks a paradigm shift in the industry. Established players and newcomers alike needed to redesign and build new data centers with high-powered processors and networking hardware, while also navigating AI energy bottlenecks.
The opportunity is coming at a steep price, with Amazon, Alphabet, and Microsoft spending record capital expenditures (capex) on AI data centers. But the prospect of accelerated growth has investors generally optimistic.
Alphabet and Amazon stocks are up 23.1% and 16.4%, respectively, year to date as of market close on May 1. But Microsoft stock is down 14% year to date despite reporting record earnings on April 29 for its third quarter of fiscal 2026.
Here’s why Microsoft is out of favor and if the “Magnificent Seven” stock is worth buying anyway.
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