The recent earnings reports from Google, Amazon, and Microsoft have highlighted a common theme: strong growth, but also sharply higher capital expenditures (CapEx). This has led to a mixed reaction from investors, with some stocks recovering from initial declines, while others have continued to fall.

Google's earnings report showed strong growth, but the company's CapEx guidance was higher than expected, leading to an initial 7% drop in the stock price. However, the stock managed to recover and closed only 0.6% lower. Amazon, on the other hand, reported strong growth, but its CapEx guidance was even higher, leading to a 10% decline in the stock price.

Microsoft's earnings report last week also showed a major surge in CapEx, and the stock has fallen about 15% over the past two weeks. This suggests that investors are becoming increasingly concerned about the impact of high CapEx on profitability and cash flow.

In contrast, Apple has rallied about 10% over the same period, suggesting that investors are favoring companies with more conservative CapEx plans. Apple's focus on generating strong cash flow and returning value to shareholders through dividends and buybacks may be attractive to investors who are wary of companies with high CapEx requirements.

Meta's stock price has been volatile, surging last week but giving back those gains this week. Tesla's stock price has also been under pressure, dropping sharply yesterday and slipping back below $400.

Based on these trends, it may be wise to consider the following investment strategy:

Buy Apple: Apple's conservative CapEx plan and focus on generating strong cash flow may make it an attractive investment opportunity.

Sell over-CapEx names: Companies with high CapEx requirements, such as Google, Amazon, and Microsoft, may be facing headwinds due to the impact of high CapEx on profitability and cash flow. Investors may want to consider reducing their exposure to these names.

Monitor Meta and Tesla: Meta's stock price has been volatile, and Tesla's stock price has been under pressure. Investors may want to keep a close eye on these names and consider adjusting their positions accordingly.

Overall, the recent earnings reports suggest that investors are becoming increasingly concerned about the impact of high CapEx on profitability and cash flow. Companies with conservative CapEx plans and a focus on generating strong cash flow may be more attractive to investors, while companies with high CapEx requirements may face headwinds.