The third-quarter financial report was originally seen as a test for the AI transaction: Is demand still strong? Can the company convert such substantial expenditures into actual results? And what about its financial condition?

Nowadays, as many large companies have successively announced their financial results, we have indeed seen some signs of progress in the construction of AI. However, these signs may not be in the direction that the market hopes to see.

The most straightforward way to observe this is by separating the winners from the losers, and the results are quite imbalanced. Although there are some encouraging highlights, the Nasdaq 100 index, which is dominated by tech stocks, is still about 6% below its peak and has fallen by 1.4% since the start of the tech earnings season.

It should be noted that these are judgments made by the stock market, and they are not evaluations of the quarterly performance of individual companies. In many cases, solid financial results are still not sufficient to dispel doubts regarding the expenditures related to AI.

The following is a breakdown of the winners and losers for each company, including the main highlights and shortcomings in each company's financial reports:

Winner

Microsoft

What happened: Microsoft achieved a 48% increase in sales on its key AI driver cloud business Azure, which can be considered a direct hit at the target. Capital expenditures were lower than expected, and the revenue guidance for the next quarter under Azure also exceeded market forecasts.

However, despite Microsoft being a relatively prominent and clear winner, its stock price still fell on Thursday because Alphabet dragged down the tech sector. (This will be mentioned later in the text.)

One-day stock price change: -0.2%

SK Hynix

What just happened: SK Hynix sent out an encouraging signal, indicating that the boom in AI memory chips continues. The company announced record-breaking sales and operating profits, and stated that more than half of its production capacity for 2027 and 2028 has already been secured through long-term agreements. Against the backdrop of this financial reporting quarter, which is filled with doubts about AI returns, SK Hynix provided the most direct answer.

One-day stock price change: +5%

Loser

Meta

What happened: Although the performance of Meta shows that AI is improving ad targeting, user engagement, and most importantly, revenue, investors ultimately focused on the costs incurred for these efforts. The company's capital expenditures in the last quarter were nearly $35 billion, which also resulted in negative free cash flow. The company has also raised its lower end of its annual expenditure forecast to $135 billion.

One-day stock price change: -7%

Alphabet

What just happened: Yet another piece of bad news overshadowes a positive case brought by AI. Google Cloud's revenue grew strongly, but Alphabet fell short of expectations in almost every other aspect: sales, earnings per share, search business, advertising business, and so on. Quarterly capital expenditures of $51 billion and negative free cash flow of $9 billion also didn't help matters.

One-day stock price change: -13%

Tesla

What happened: Even Tesla's profits exceeding expectations were not enough to offset a negative AI signal. The company lowered its capital expenditure forecasts for 2026, and investors interpreted this as a possible warning that its ambitions for Robotaxi and Optimus may not be advancing fast enough.

One-day stock price change: -3%

Caterpillar

What happened: Caterpillar's sales and profits exceeded expectations slightly, but not enough to dispel market doubts about its power generation business, which is what links it to AI Construction. The company stated that overall revenue growth in the next quarter will be "moderate." For a company that has always been one of the top performers in the Dow Jones index, this report is not enough to impress investors.

One-day stock price change: -9%

Amazon

What happened: Last quarter, Amazon invested a whopping $77 billion in property and equipment, far exceeding analysts' expectations. The company's expenditures ultimately resulted in a negative free cash flow of over $40 billion. Investors chose to focus on this massive capital expenditure rather than AWS's sales performance, which continued to grow at an accelerated pace for the sixth consecutive quarter.

One-day stock price change: To be determined