If you're wondering whether Big Tech can sustain its AI spending spree, Wedbush analyst Dan Ives has an answer: absolutely, and the earnings are about to prove it.
Ives took to X on Friday with a prediction that Microsoft Corporation (MSFT), Alphabet Inc. (GOOGL), and Amazon.com Inc. (AMZN) are headed for a "very strong" Q4 earnings season. The catalyst? Surging demand for AI enterprise services across their cloud platforms.
But here's where it gets interesting. Ives framed the current tech landscape with a historical comparison that should catch everyone's attention: "This is a mid-1996 Moment...and NOT a 1999 Moment for tech." Translation: we're in the early internet era when genuine adoption and profitability were taking hold, not the speculative bubble that eventually popped spectacularly.
The Semiconductor Signal
Ives isn't making this call in a vacuum. Taiwan Semiconductor Manufacturing Co. Ltd. (TSM) just kicked off tech earnings season with a bang, reporting a 35% profit increase fueled by global demand for its chips. When the company that makes everyone else's semiconductors is crushing it, that's usually a pretty good sign for the rest of the tech ecosystem.
The ripple effects extend to neocloud providers like CoreWeave, Inc. (CRWV) and Nebius Group N.V. (NBIS), whose business model of providing specialized compute power is getting validated by these strong semiconductor results. The AI infrastructure buildout is real, and the spending is translating into actual business.
Microsoft's $4 Trillion Ambition
Microsoft's commitment to fully fund its data center energy costs has market watchers predicting the tech giant could reclaim a $4 trillion valuation. That's not just hype, it's a signal that the company is willing to put serious capital behind its AI infrastructure bet.
But there's a reality check coming. Jack Fu, chief executive of Draco Evolution, told MarketDash that as we step into 2026, "the market will care more about return on that spend, not just the headlines." In other words, the honeymoon phase where spending announcements alone move stocks might be ending. Investors will want to see actual returns.
What's Next
Microsoft reports earnings on January 28, while Alphabet and Amazon are expected to follow on February 4 and February 5, respectively. These reports will test Ives' thesis in real time.
For context on how these stocks have performed lately: over the past year, Microsoft stock climbed 7.56%, according to market data. Alphabet surged 71.37%, and Amazon gained 7.94%.
The earnings season ahead should reveal whether the AI spending boom is building a sustainable business foundation or just creating impressive headlines. If Ives is right, we're watching the early chapters of a genuine technology transformation, not the final act of a speculative bubble.
