Amazon, Microsoft and Google are quietly morphing their businesses — and Wall Street is missing the big picture

A UBS analyst says Amazon, Microsoft and Alphabet are shifting from selling AI compute to becoming distribution hubs for AI models, a change that could materially boost cloud revenue and isn’t fully priced into their shares. Amazon’s $5 billion investment in Anthropic and Anthropic’s agreement to spend over $100 billion on AWS highlight the growing commercial ties. UBS points to strong AI revenue metrics — Microsoft’s $37 billion annualized AI revenue (about $33 billion from Azure), AWS AI revenues surpassing $15 billion, and Google Cloud’s backlog that could drive expected Google Cloud revenue to $231 billion — as evidence these hyperscalers will see durable, higher-margin growth. The analyst believes this expansion of AI-related revenue streams could lift revenue estimates and stock valuations for the big cloud providers.