Microsoft beat estimates when it reported earnings last week. Unlike rival Google, Microsoft shares jumped after reporting, mainly because revenues at its cloud computing platform, Azure, topped expectations.

But subsequent chatter about Microsoft leading the AI (artificial intelligence) race may be premature. Azure may be gaining market share but the most recent quarter is not evidence of a definitive trend. Indeed, even after last week’s reversal, Alphabet shares have outperformed Microsoft’s in 2023.

[ Google parent Alphabet's cloud division misses revenue estimatesOpens in new window ]

However, last week’s rotation out of Google/Alphabet and into Microsoft is noteworthy in one respect. Research Affiliates founder Rob Arnott often warns about the so-called big market delusion – when all companies in a growing industry rise together, even though as competitors some must win and some must lose. Not all AI stocks can grow to the sky. Growth in one company may come at the expense of another.