Overview
- Alphabet reported $119.8 billion in quarterly revenue and Google Cloud grew about 82% to roughly $24.8 billion, a run rate that now outpaces IBM’s entire quarterly business.
- IBM posted roughly $17.2 billion in revenue with software up about 5% and infrastructure down about 7%, and the company trimmed full‑year growth guidance to between 4% and 5% because of weaker consulting and hardware sales.
- Alphabet has expanded capital spending plans to more than $200 billion in cumulative capex to build AI data centers and buy specialized chips and power capacity needed for large AI models.
- Corporate IT budgets are being reallocated from on‑premises hardware and legacy consulting toward cloud‑based AI services, giving hyperscalers immediate revenue gains and creating timing risk for vendors tied to legacy infrastructure.
- IBM is banking on multi‑year initiatives such as quantum computing to drive future growth by about 2028–2029, but that longer horizon means near‑term pressure for employees, customers, chip suppliers, and data‑center operators.