Overview
- Alphabet, which raised its 2026 capital budget to $180–$190 billion and signaled a larger outlay in 2027, saw shares jump about 10% after Wednesday’s results.
- Google Cloud posted 63% revenue growth to $20 billion as AI product sales rose about 800%, operating income tripled, and its backlog swelled to about $460 billion including new sales of in‑house TPUs.
- Investors punished heavier spend without clear returns as Meta fell and Microsoft slipped, with Microsoft showing a $627 billion commercial backlog that barely grew quarter to quarter and a large revenue tie to OpenAI near 45%.
- Big Tech spent about $130 billion on data centers in Q1 and now plans more than $725 billion for 2026, while higher power, construction, and chip costs are reducing compute per dollar and favoring firms that design their own chips such as Alphabet and Amazon.
- The AI investment wave helped push the S&P 500 and Nasdaq to record highs, yet analysts warn strained supply chains and rising build costs could delay durable payoffs until after 2027.