Microsoft, Apple, Meta and Amazon’s stocks are lagging the S&P 500 this year—but Google is up 62% and AI investors think it has room to run

Big Tech has fractured in 2025 as AI execution drives a wide performance split—Alphabet is up roughly 62% while Microsoft (~13%), Apple (~12%), Meta (~10%) and Amazon (~1%) trail the S&P 500’s ~16% gain. Google’s outperformance reflects a self-reinforcing AI “flywheel”—DeepMind research, a revamped Gemini, Google Cloud, proprietary TPUs (Ironwood) and broad product integration that appear accretive to search ad revenue—yet its P/E (~30) is still comparable to some peers, implying room for further upside if growth continues. The other four companies retain strategic assets (AWS and retail reach for Amazon; OpenAI ties and enterprise footprint for Microsoft; devices and privacy positioning for Apple; social reach and Llama for Meta) but face chip, cloud, monetization or execution gaps; a major acquisition (e.g., Anthropic) or a shift in consumer device adoption could reshape the race, but near-term leadership favors Google.

Analysis

Big Tech performance in 2025 has diverged sharply along lines of AI execution: Alphabet is up roughly 62% while Microsoft (~13%), Apple (~12%), Meta (~10%) and Amazon (~1%) trail the S&P 500’s ~16% gain, indicating market differentiation based on AI progress. Google’s rally is linked to a self-reinforcing AI "flywheel"—DeepMind research, a rebuilt Gemini after February 2024 misfires and improved H2 releases, product launches like Nano Banana, Google Cloud infrastructure and in‑house TPUs (Ironwood, the seventh iteration)—which have enabled seamless integration across Search, YouTube, Maps and Workspace and allowed Google to charge more for AI-enhanced ad inventory. The company’s P/E of ~30 is comparable to some peers but low relative to its 62% share gain, implying the market may not have fully priced AI-driven revenue upside. By contrast, Amazon’s AWS strength is offset by underwhelming Trainium chips and a large $8bn Anthropic stake while Anthropic reportedly uses Google chips; Meta has Llama progress but lacks cloud/chip scale and faces internal friction; Microsoft benefits from cloud and OpenAI ties that are currently strained; Apple’s privacy stance constrains large-scale data strategies. Key near-term catalysts that could re‑rank winners are major M&A (eg, Anthropic) or a meaningful shift in consumer device adoption for AI.

Key Decisions for Investors

• Consider overweighting Alphabet (GOOGL/GOOG) relative to other Big Tech given its integrated AI advantages and a P/E (~30) that may not fully reflect future AI-driven revenue, monitor quarterly signals of ad pricing and Google Cloud AI monetization
• Lean toward underweight or selective trimming of Amazon and Meta until clearer evidence of superior AI ROI, chip competitiveness (Trainium) or improved model performance emerges, track Anthropic developments as a potential structural catalyst
• Monitor Microsoft’s OpenAI relationship and CoPilot enterprise traction and maintain selective exposure to Nvidia (NVDA) or compute-focused names as a hedge on continued AI infrastructure demand