Name: Wall Street backs AI winners, and Meta’s not one of them this quarter
Uploaded: 2025-10-31T23:51:09.682Z
Duration: 2 min 35 s
Description: CNBC’s MacKenzie Sigalos breaks down why investors are punishing Meta’s soft guide and lack of a cloud business, while rewarding Amazon and Alphabet’s AI momentum.

CNBC’s MacKenzie Sigalos breaks down why investors are punishing Meta’s soft guide and lack of a cloud business, while rewarding Amazon and Alphabet’s AI momentum.

Wall Street

Amazon and Alphabet have been identified by Wall Street as the leading companies in monetizing artificial intelligence this quarter. Amazon reported its strongest AWS growth since 2022 and is projected to achieve record revenue, while Alphabet saw a 34 percent increase in cloud revenue and a significant expansion in its deal pipeline.

In contrast, Meta's shares experienced their largest decline in three years despite beating revenue and earnings expectations, as investors questioned the company's AI return on investment without a cloud business. Microsoft maintained strong cloud growth but did not see a stock increase, and the focus has shifted to companies with clear plans for AI monetization.

Wall Street backs AI winners, and Meta’s not one of them this quarter

Hey John. So the hyperscaler prints are in and Wall Street is starting to pick its A.I. winners. Amazon defied expectation posting its strongest A.W.S. growth since 2022. It also showed that its in-house chip strategy is setting the company up to bank record revenue of over two hundred billion dollars next quarter. Alphabet also riding high with cloud revenue jumping 34 percent after landing deals with open A.I. and Metta and its future deal pipeline. That's up almost 80 percent from a year ago. Now both those companies hitting fresh all time highs off the back of earnings. Meanwhile Microsoft continues to lead on raw cloud growth at 40 percent. But with expectations sky high even a solid quarter couldn't lift that stock. And then there's Metta. It beat on revenue and earnings but shares logged their worst drop in three years with investors questioning how CEO Mark Zuckerberg plans to deliver real ROI especially without a cloud business to justify all that compute spend. Bottom line John everyone is pouring billions into A.I. but only Amazon and Alphabet are starting to convince Wall Street that they can actually monetize it. Yeah I wonder Mac though Metta has been doing a good job monetizing reels and that's really an A.I. driven product. And to me that was the test case for what Zuckerberg has been saying about how A.I. is going to benefit them internally perhaps provide a proof to the rest of the market of what it can do. Unlike previous versions of matching people to content to boost engagement this is driven by A.I. guessing based on what your friends look at what you'll want to look at as well. So maybe this move this week is a little bit of a too quick reaction to just the numbers out of Metta. No I mean I feel like up until this quarter it was Metta that was actually showing an ROI for their A.I. investments in the context of their ad strategy. And what changed the narrative that changed this week for Alphabet was that they were talking about a monetization strategy for Gemini. And that's part of why you saw this reversal was actually fascinating over the course of the earnings call with Sundar Pichai on Wednesday. The Alphabet CEO and then later with Andy Jassy as they both talked about this monetization strategy very different for the two companies. You started to see the stock come up after hours. But to your point John yes Metta has been the leader in terms of showing an ROI. I feel like what changed this quarter is the fact that now we're hearing Alphabet. They have a plan to make money off of their A.I. strategy and search that beat expectations. That was a big concern. Will their A.I. business cannibalize what they're doing over a chrome and their search segment.

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