Here's my power rankings for the big 4 hyperscalers after this earnings season

An important development from the financial markets: For months, I have been after Amazon CEO Andy Jassy to give us "line of sight" into something that can explain why they're is spending so much money building out all of these data centers. I wanted to know if this is just some sort of rainbow without a pot of gold, or whether there really is a there there. It's among our biggest positions in the Club portfolio, and I was getting pretty darned antsy that I was into a far more dicey situation than when we first bought the stock almost a decade ago.

So, I kept hammering about the line-of-sight explanation. Somehow my musings got through to him. On Thursday's earnings call — as I referenced in Friday's Morning Meeting, and Jeff Marks talked about in his excellent Homestretch piece — Jassy gave us what I wanted.

Economic Details

"At this level of spend and higher, we have clear line-of-sight to strong financial returns," the CEO said. I want to spend more time unpacking what Jassy said because it has changed the minds of many about what seemed to be a ridiculous, if not ruinous, level of spending on artificial intelligence infrastructure. It was his calm, thought-out presentation that allowed Jassy to raise his 2026 capex budget by $20 billion to $220 billion and have his stock, in the wake of that announcement, gallop to its biggest one-day gain in over a decade.

58 and added $382 billion in market cap. Contrast that to Google parent Alphabet , which on July 22 raised its capex guide by a similar amount — up $15 billion to a range of $195 billion to $205 billion. In response, the stock had its third-worst day in the past two years.

Despite liking the company very much, I made clear in the aftermath that I was disappointed in Alphabet's earnings call , particularly the discussion around balance-sheet health, despite liking the company very much. In a bit of irony, Jassy's rigorous comments Thursday night took up all the hyperscalers' stocks in Friday's session. That includes Alphabet, which spiked 6.

Analyst Views

7% and has now erased all its post-earnings losses. Yes, Jassy's words were that important. It didn't hurt that Jassy had the goods: "Even at , we will not have enough capacity to meet all the demand we have in 2026 and I believe this dynamic will also be true in 2027, too.

In fact, the demand we already have for 2028 is striking. And remember, enterprises are still very early in using inference at scale in their current production applications. I heard the word "striking" all Friday.

It was pitch-perfect. You want to argue with someone trying to meet "striking" demand? Jassy also said that while he long believed Amazon Web Services could become "a few hundred billion dollar revenue business," he now believes it will be at least double that and "very possibly be a $1 trillion-annual revenue business for us in time.

Financial markets are tracking the development closely as investors assess the likely impact.