NVDA posted 85% revenue growth and MSFT's Azure crossed $100B annually, but Emanuel says what has peaked is the growth rate itself, not earnings. Widening investment-grade tech spreads, driven by Microsoft's $175B CapEx and massive AI borrowing, are the clearest signal the buildout is straining balance sheets. Act now: the analyst who called NVIDIA in 2010 just named his top 10 AI stocks — and Microsoft didn't make the cut.
Grab the names FREE today. Julian Emanuel, Evercore ISI's chief equity derivatives and quantitative strategist, said on CNBC this week that megacap tech results this quarter were "breathtaking" and then said, "the other side of breathtaking is it is likely to be as good as it gets." In the same breath, he told viewers to stay long on technology into 2027. The tension resolves once you separate two ideas that usually get mashed together.
Peak growth rate refers to the second derivative, meaning the rate of improvement. Declining earnings would be a comment about the level. Emanuel is talking about the former, and his own math on the record makes that explicit when he says, "even if we come off of these rates, you're still talking of earnings growth that's likely to be close to 20%, perhaps higher.
And then, you know, potentially double digits next year as well." That is a maturing cycle. NVIDIA (NASDAQ:NVDA) reported Q1 FY2027 revenue of $82 billion, up 85% year over year, with data center revenue of $75 billion and a $91 billion revenue guide for the next quarter, disclosed in the company's SEC filing. Microsoft (NASDAQ:MSFT) closed FY2026 with Azure crossing $100 billion in annual revenue and growing 41%, and guided to roughly 45% Azure growth in constant currency for Q1 FY27.
Alphabet (NASDAQ:GOOGL) posted Q2 revenue of $119.80 billion, up 24.2%, with Google Cloud accelerating to 82% growth. Comparisons get harder from here because the base numbers are enormous, and year-over-year rates will compress by definition. That compression is what a peak in growth rate looks like when earnings power is still climbing.
NVIDIA trades at a forward P/E of about 25x, Microsoft at about 25x, and Alphabet at about 17x. None of that pricing requires the growth rate to keep accelerating. It requires the growth to keep happening.
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