This is by far one of the dumbest markets I've seen in a really long time (Save this).
Milk Road AI Twitter · Milk Road AI (@MilkRoadAI) · 2026-07-29
Milk Road AI argues the market irrationally sold off Meta, Microsoft, and Google following strong Q2 2026 earnings, misreading AI capex spend as overbuilding risk rather than supply-constrained demand, and frames the dip as a long-term buying opportunity in Mag7 stocks.
Appears in
Extraction
Topics: big-tech-earningsmag7-stocksai-capexmarket-sentiment
Claims
- Meta's Q2 EPS miss was driven by one-time items—legal charges, severance, and AI spending—not underlying business deterioration, while revenue rose 28% year over year to $60.8 billion.
- Microsoft beat on nearly every metric including Azure growth of 43% and revenue of $90 billion, yet shares rose only about 1% after hours.
- Google Cloud revenue more than doubled to $24.8 billion (up 82%), yet Alphabet's stock was still sold off despite a clear earnings beat.
- Microsoft's CFO confirmed Azure growth is capped by available capacity, not demand, indicating supply-constrained rather than demand-limited growth.
- Mag7 companies are expected to grow combined free cash flow nearly 10x to roughly $650 billion over the next four years.
Key quotes
Azure growth is capped by available capacity.
Punishing profitable, fast growing businesses for spending to meet real demand is exactly the kind of short term reaction that tends to look foolish in hindsight, once the AI infrastructure they're building actually starts converting into the earnings growth the market is currently discounting.
Meta, Google, Microsoft, and Amazon are expected to grow combined free cash flow nearly 10x to roughly $650 billion over the next four years.