Alphabet, Microsoft, Amazon, and Oracle Just Gained $1.9 Trillion in 3 Days. Here's Why Microsoft's Run Isn't Over.

Recent earnings reports alleviated investors’ concerns about cloud demand and AI spending.

Microsoft has the best free cash flow and operating margins of the cloud majors.

Even after its latest run-up, Microsoft is still an impeccable value.

Alphabet (NASDAQ: GOOG) (NASDAQ: GOOGL) reported earnings on July 22. The next day, the stock closed down 7.1% in response to higher capital expenditure (capex) guidance and fears of margin compression and lower free cash flow (FCF). As of the July 23 market close, cloud computing giants Alphabet, Microsoft (NASDAQ: MSFT) , Amazon (NASDAQ: AMZN) , and Oracle (NYSE: ORCL) were all badly underperforming the major indexes year to date, with Alphabet and Amazon up a little over 1%, Microsoft down 21.1%, and Oracle down 38.4%.

A lot has changed since. As of market close on Aug. 3, Amazon is now up 23% year to date, Alphabet is up 19.3%, Microsoft has recovered all of its losses and is up 0.8%, and Oracle is clawing back with a 27.2% year-to-date decline.

Missed Nvidia in 2009? This Rare Signal Is Flashing Again. In 2009, a "Double Down" signal flashed for a little-known chipmaker called Nvidia. For the first time in years, that same "Total Conviction" signal is flashing for a company 1/100th the size of Nvidia. Continue »

Here's why investor sentiment has shifted, and why Microsoft is the best cloud stock to buy in August.

In just three market sessions, from July 29 close to Aug. 3 close, these four cloud computing giants gained a combined mind-numbing $1.857 trillion in market cap -- which is like creating a company as valuable as Broadcom out of thin air.