Copyright Benzinga
Steve Eisman, the investor famed for predicting the 2008 collapse, has warned that Meta Platforms Inc. (NASDAQ:META) is losing a critical AI war against Alphabet Inc.’s (NASDAQ:GOOG) (NASDAQ:GOOGL) Google and Microsoft Corp. (NASDAQ:MSFT), arguing the company simply “cannot bear the burden” of the industry’s massive spending race. MSFT, GOOG To Win AI War Because Of Cloud Businesses The warning came as Eisman analyzed the puzzling market reaction to last week’s Big Tech earnings. Despite Meta, Google, and Microsoft all “impressively” beating revenue and earnings estimates, Meta’s stock plunged while Google’s surged. Eisman dismissed common press explanations for the divergence, pointing instead to the staggering cost of AI capital expenditure. While all three are spending heavily—with Meta in the “low 70 billion” range, Microsoft at $80 billion, and Google at “$90 plus billion”—he argued the market is finally scrutinizing who can afford it. Here’s Why Meta Tumbled Despite Earnings Beat The key difference, Eisman explained, is that Google and Microsoft have “enormous cloud businesses” and are already generating revenue from their AI investments. “Meta has no cloud business,” Eisman said. “So its AI spending is solely to create new products.” Eisman pointed to the companies' balance sheets as definitive proof. He highlighted that Meta’s cash and cash equivalents plummeted by 43% in 2025, falling from $77.8 billion at the end of 2024 to $44.4 billion. In contrast, both Google’s and Microsoft’s cash reserves increased over the same period.’ See Also: Mohamed El-Erian Warns Some AI Names Will ‘End Up In Tears’ But Supports Limited Winners In AI’s ‘Rational Bubble’ AI Boom Is Far From Over “All this capex is expensive, but clearly Google and Microsoft are bearing this burden more easily than Meta,” Eisman concluded. “And that’s why I think Meta’s stock was down.” He added that the massive spending commitments from all three giants proved the AI boom is far from over. “Anyone thinking that the AI story is going to end anytime soon,” Eisman said, “was disabused of that with these results.” What Do Edge Rankings Say About These Companies? META’s stock was 6.13% higher year-to-date and 11.17% over the year. Benzinga’s Edge Stock Rankings indicate that it maintains a weaker price trend over the short, medium, and long terms, with a moderate value ranking. Additional performance details are available here. MSFT was higher by 21.16% YTD and 20.70% over the year. MSFT maintained a stronger price trend over the medium and long terms, with a weak trend in the short term. It has a solid quality ranking. Additional performance details, as per Benzinga’s Edge Stock Rankings, are available here. GOOG soared 49.37% YTD and 59.68% over the year. It maintained a stronger price trend over the long, short, and medium terms, with a poor value ranking. Additional performance details, as per Benzinga's Edge Stock Rankings, are available here. While the S&P 500, Dow Jones, and Nasdaq 100 closed higher on Wednesday, the futures were lower on Thursday. Read Next: Chamath Palihapitiya Warns AI Push By GOOGL, META, MSFT And AMZN Using NVDA Chips Could Double Electricity Rates Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors. Photo courtesy: Shutterstock
