Wall Street analysts who follow tech and cloud computing were all but popping Champagne last Wednesday.

Microsoft had reported stellar financial results and strong growth that could be connected to artificial intelligence. After the market closed, extended-hours trading shot Microsoft's share price up by as much as 9%. The next day, Microsoft was briefly valued at $4 trillion. (Then, as all good celebrations do, the rally took a breather on Friday as Microsoft's share price fell by almost 2%, before gaining more than 4% by midday Monday.)

For Microsoft CEO Satya Nadella and Chief Financial Officer Amy Hood, during a Wednesday call with analysts, almost every question began with some sort of congratulations.

"I've been covering Microsoft for a while and I don't think I've ever seen a quarter where everything came together this well," said Keith Weiss, an analyst with Morgan Stanley, who asked the first question on the call with Microsoft brass. "Congratulations on that execution."

Then on Thursday, when Amazon CEO Andy Jassy and Chief Financial Officer Brian Olsavsky answered questions from analysts, the mood chilled.

Amazon's cloud computing division, Amazon Web Services, reported revenue that beat estimates, but Wall Street was underwhelmed by the growth. The company's share price fell by more than 8% on Friday and were off 1% on Monday.

"There is a Wall Street finance person narrative right now that AWS is falling behind in (generative AI) with concerns about (market) share loss," Morgan Stanley analyst Brian Nowak said during the call. "Can you address that and what is your rebuttal to that?"

Nowak also acknowledged AWS is a big business — it's the largest cloud-computing provider in the world — but asked if there's any reason to assume its growth would accelerate in the back half of the year.

That followed a question from Doug Anmuth, an analyst with JPMorgan, who said, "we're seeing significantly faster cloud growth among the No. 2 and 3 players in the space," and asked if Amazon believed that was due more to customer demand or infrastructure supply.

Jassy defended the company's cloud growth by saying growth rates are a function of the base – that it's harder to show growth when starting from a larger number.

He said AWS is a "meaningfully larger business" than competitors and that the "second player is about 65% the size of AWS." Microsoft and Google are the second- and third-largest cloud providers.

Jassy didn't name competitors, but he jabbed Amazon's cloud peers over security. Microsoft's security issues have repeatedly drawn criticism and government scrutiny, including after a breach that affected private companies and government agencies in July.

"For most companies, they’re putting data that they really care about in the cloud," Jassy said. "The security and the privacy of that data matters a lot, and there are very different results in security in AWS than you’ll see in other players."

Amazon doesn't give AWS-specific revenue and profit forecasts, but Jassy said he's optimistic about the division's growth as more companies adopt AI technology. Since AWS is the biggest cloud provider, there's a greater chance a company adopting AI applications will do so on Amazon's cloud.

"It is still so early right now in AI," he said.

Jassy's answers didn't soothe traders. The company's stock kept sliding through his comments, eventually falling by more than 6% in after-hours trading Thursday, losses that continued Friday.

AWS reported $30.8 billion in revenue for the months of April through June, reflecting 18% year-over-year growth. But its main peers, Microsoft and Google, reported 39% and 32% growth for their cloud divisions.

Revenue growth is such an intense focus for cloud computing giants because of the billions they're pouring into AI infrastructure and technology.

After spending more than $88 billion in capital expenditures over the past year, Microsoft plans to spend another $30 billion by the end of September. Amazon projects it'll spend more than $100 million on investments this year between delivery expansion and AI infrastructure, much of it going toward the latter.

Cloud growth has been the key for Microsoft under Nadella, who took over in 2014, but the company has historically obscured the results of its cloud division, Azure. Microsoft would lump revenue from the business in with commercial products like Microsoft 365 or LinkedIn services.

On Wednesday, Microsoft's eye-rolling gamesmanship ended. The company reported Azure revenue, showing the division brought in $75 billion for the year, up 34% from the year before. By comparison, AWS is projected to make more than $123 billion this year.

Microsoft's earnings felt like a crowning moment for Azure, both on Wall Street and within the company. After Nadella's call with analysts, he shared an internal message with employees reflecting on 15 years of the cloud division.

"I still remember what it felt like in the beginning. We were all in. We believed in the arc of technology," he said. "This is what's required to make long-term progress: have a bold vision, complete the thought and persist through all the ups and downs.

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