Microsoft Struggles as Tech Giants Make Big Moves
As of October 2026, Microsoft (NASDAQ: MSFT) is the worst-performing stock among the “Magnificent Seven,” facing pressure from slower growth in its Azure cloud platform and high costs associated with AI competition. In contrast, Alphabet (NASDAQ: GOOG, GOOGL) and Amazon (NASDAQ: AMZN), both also heavily investing in AI, show promising growth potential. Alphabet allocated $91 billion in capex last year and plans to invest $175 billion to $185 billion in 2026, while Amazon announced $200 billion in capex for the same period after spending nearly $132 billion previously.
Alphabet’s advancements with its Gemini AI engine and growing cloud service have helped mitigate investor skepticism, with a P/E ratio of 29. Amazon’s profitability is largely tied to its Amazon Web Services segment, which has seen robust growth and will benefit from AI innovations. Amazon’s stock currently trades at a P/E ratio of 30, down from its average above 50, suggesting a good buying opportunity for investors looking for value amid current market conditions.
