After Nvidia, Microsoft, Apple, and Alphabet each crossed the $4 trillion mark, investors have been wondering which company will be the next to join (or rejoin) that elite club. With Microsoft (NASDAQ: MSFT) sitting at about $3.1 trillion as of this writing, despite briefly counting itself among the club’s members last summer, it might seem like the obvious pick to get back above the threshold first. But after Amazon’s (NASDAQ: AMZN) latest earnings update, the e-commerce and cloud giant arguably looks like the better bet.
Both companies are riding the same wave: surging demand for artificial intelligence (AI) infrastructure and the cloud computing services that power it. And both are spending aggressively to meet that demand. But the underlying trajectories of these two companies may be diverging in a way that matters for which stock crosses $4 trillion next.
Image source: Getty Images.
A blowout cloud quarter, an enormous backlog, and an accelerating chips business may have just shifted the trillion-dollar race in a meaningful way.
After Nvidia, Microsoft, Apple, and Alphabet each crossed the $4 trillion mark, investors have been wondering which company will be the next to join (or rejoin) that elite club. With Microsoft (MSFT +1.70%) sitting at about $3.1 trillion as of this writing, despite briefly counting itself among the club’s members last summer, it might seem like the obvious pick to get back above the threshold first. But after Amazon’s (AMZN +1.70%) latest earnings update, the e-commerce and cloud giant arguably looks like the better bet.
Both companies are riding the same wave: surging demand for artificial intelligence (AI) infrastructure and the cloud computing services that power it. And both are spending aggressively to meet that demand. But the underlying trajectories of these two companies may be diverging in a way that matters for which stock crosses $4 trillion next.
Image source: Getty Images.
AWS is reaccelerating in a meaningful way
Amazon’s first-quarter revenue rose 17% year over year to $181.5 billion, and operating income climbed to $23.9 billion — up from $18.4 billion a year earlier. The quarter’s highlight, though, was Amazon Web Services (AWS). Revenue in the cloud computing segment grew 28% year over year to $37.6 billion — the fastest growth rate for the segment in 15 quarters.
The segment’s momentum has been steadily building for a year. From 17% to 20% to 24% — and now to 28% year-over-year growth rates, the segment has put together an unmistakable acceleration trend over the last four quarters.
“AWS is now a $150 billion annualized revenue run rate business,” said Amazon CEO Andy Jassy during the company’s first-quarter earnings call. “It’s very unusual for a business to grow this fast on a base this large.”
Amazon
Today’s Change
(1.70%) $4.50
Current Price
$269.56
Behind the scenes, the demand pipeline looks even stronger.
Amazon’s AWS backlog ended the quarter at $364 billion. And that figure does not include the recently announced $100 billion-plus commitment from Anthropic.
Then there’s Amazon’s chips business, which sits at the heart of the company’s AI strategy. Custom silicon offerings Trainium, Graviton, and Nitro, when combined, have crossed a $20 billion annualized revenue run rate, collectively growing at a triple-digit year-over-year rate. This gives AWS a homegrown alternative to Nvidia that could meaningfully improve unit economics over time.
Of course, achieving growth like this requires some massive spending. Amazon’s capital expenditures totaled $44.2 billion in Q1, primarily driven by AI infrastructure investments. And the company’s aggressive spending ramp has put trailing-12-month free cash flow at just $1.2 billion — down from $25.9 billion a year earlier.
But management seems confident these investments will pay off over the long haul — and based on the company’s significant acceleration in its AWS business and its explosive growth in its chips business, I’m betting they will.
Microsoft’s earnings report was less impressive
Microsoft’s fiscal third quarter of 2026 (the period ended March 31, 2026), which was reported on the same day as Amazon’s first-quarter update, was strong by most measures. Total revenue rose 18% year over year to $82.9 billion, and its “Azure and other cloud services,” which is primarily comprised of Microsoft’s cloud computing business, saw revenue grow 40% year over year. And the software giant said its AI business surpassed an annualized revenue run rate of $37 billion — up 123% year over year.
But Azure’s growth has now held roughly flat at around that 40% level for several quarters, while Amazon’s AWS’ growth rate continues to climb. And Microsoft’s own outlook for the next quarter calls for Azure growth of 39% to 40% in constant currency — not an acceleration.
And another issue is Microsoft’s capital spending. The software giant is now planning roughly $190 billion in capital expenditures in calendar 2026 — well above what investors had expected. Sure, this is below the approximately $200 billion Amazon expects to spend, but Amazon’s cloud computing business is much bigger — and it’s proving to investors that its spending ramp is paying off in an acceleration in the business.
Microsoft
Today’s Change
(1.70%) $6.91
Current Price
$414.69
To get to $4 trillion, Microsoft’s market capitalization would need to climb about 30% from current levels. Amazon’s, at roughly $2.9 trillion today, would need to climb about 38%. So, Microsoft is mathematically closer.
But the underlying setup arguably favors Amazon: AWS’s growth is accelerating, the chips business is scaling rapidly, and the company’s fast-growing advertising business (now a $70 billion trailing-12-month revenue stream) provides yet another exceptional catalyst.
With that said, if AI demand cools or hyperscalers digest existing capacity, both companies could see growth slow. And Amazon’s free cash flow may remain suppressed for some time as the company spends aggressively on growth opportunities. Even so, even after Amazon’s stock has risen more than 30% in just the last 30 days, shares trade at about 32 times earnings — a reasonable valuation multiple given the company’s accelerating cloud business, its durable e-commerce engine, and catalysts from chips and advertising.
After this latest update, Amazon stock continues to look attractive — and a run to a $4 trillion market capitalization may come sooner than many expect.
