In the latest Zacks Investment Ideas feature, Microsoft, Alphabet, and Amazon are highlighted as key players in the AI market. Microsoft’s Q4 earnings beat expectations with a 24% increase in adjusted EPS and 17% sales growth. Concerns arise over high CapEx and a slowdown in Azure growth.

Alphabet also posted a double-beat in earnings, with a 31% increase in adjusted EPS and 18% sales growth. Google Cloud saw strong results with a 48% revenue increase. Both companies are heavily investing in AI and cloud services, with bullish earnings estimates for the future.

Investors have shown concern over Microsoft’s high CapEx for cloud and AI offerings, leading to a negative post-earnings reaction. Despite strong growth, valuation multiples have come down to more favorable levels. In contrast, Alphabet remains rich relative to the general market, but both companies are seeing positive earnings estimate revisions.

A semiconductor company, not as well-known as NVIDIA, is emerging as a key player in the market. With strong earnings growth and expanding customer base, it is positioned to benefit from the growing demand for AI, Machine Learning, and IoT. Global semiconductor manufacturing is projected to nearly double by 2028.

Read more at Nasdaq: Zacks Investment Ideas feature highlights: Microsoft, Alphabet and Amazon