Microsoft, Alphabet, and Amazon reported strong earnings last week, yet Wall Street wasn’t impressed. Shares of all three closed lower after the results, as investors looked past revenue and profit and zeroed in on how much cash the companies are burning to build artificial intelligence infrastructure.
For years, the trio has rewarded shareholders with superior market returns, thanks to what Warren Buffett calls “moats,” the barriers to entry that shield a business from competitors.
Microsoft pairs a powerful global brand with network effects: The more people use its products, the more valuable it becomes. More than one billion people use Windows, and that network, along with the “lock-in” it creates, makes the company’s market nearly impossible for rivals to invade. …