Four of the biggest companies in America—that represent more than 15% of the S&P 500 (SP500)—reported earnings after the bell on Wednesday, providing a snapshot into the tech sector at a time of economic uncertainty. Spending on artificial intelligence computing infrastructure has gone into overdrive, with investors closely watching capital expenditures and growth from these burgeoning industries. At the same time, the legacy businesses of these giants have been resilient, like enterprise software, digital advertising, social media and e-commerce.

Who's up? Despite mega spending on the AI dream, massive cloud growth and profits sustained Alphabet (GOOGL) and Amazon (AMZN) following earnings. Shares of the former zoomed ahead 7% to a fresh record high on strong financial numbers, while the latter climbed 3% to a record as well, after blowing past AWS estimates. "Despite R&D increasing from $13.6B-$17B, Alphabet's operating margin still expanded," said SA Investing Group Leader Dhierin Bechai. "It is a signal that Alphabet is monetizing AI at scale and throughout its entire ecosystem. AI is not just an additional revenue stream from AI products/compute, but also enhancing other parts of the business, such as search, YouTube and subscriptions."

Who's down? Microsoft (MSFT) and Meta Platforms (META) are already off more than 20% from their all-time highs notched last November. Concerns have centered around pressure on the software industry due to the disruption of AI, and Microsoft didn't do much on its earnings call to assuage those worries. For Meta, there have been serious fears about just how much the company is shelling out since it has been one of the most aggressive AI spenders. The stock slid 7% AH on Wednesday as the firm outlined it would increase capex yet again, while lackluster guidance spooked investors and Reality Labs lost a whopping $4B last quarter.

Up next: With Apple's (AAPL) Tim Cook set to step down as chief executive, eyes today will be on the tech giant's earnings after the bell. Last week, Apple appointed longtime hardware chief Ternus as CEO, signaling the company's stronger emphasis on hardware innovation and a push to integrate AI capabilities into existing devices to maintain growth and compete with emerging AI technologies. “We expect Cook and Co. to expand on the company’s AI strategy on the call as the Street looks for more insights into AAPL's plans to revamp Siri to drive its AI strategy,” noted Wedbush analyst Dan Ives, adding that it's time for Apple to lay down the blueprint to accelerate its AI strategy in 2026. (2 comments)