Overview
- Results reported Wednesday showed AI and cloud driving outsize growth at Alphabet, Amazon and Microsoft, prompting a Thursday lift in the S&P 500 despite hotter inflation data.
- Alphabet said Google Cloud revenue reached about $20 billion, up 63% year over year, and disclosed a roughly $462 billion backlog that signals strong contracted demand.
- Amazon reported AWS revenue of $37.6 billion, up 28%, and CEO Andy Jassy said customers have signed more than $225 billion in commitments for its Trainium AI chips.
- Microsoft said its AI business is running at roughly $37 billion a year and projected around $190 billion of 2026 capital spending to expand datacenters and chips, while cautioning capacity will stay tight through 2026.
- Across Big Tech, sharply higher data center and silicon investment is lifting growth but draining cash, with companies flagging lower free cash flow and ripple effects for customers who may face tight AI compute supply and higher costs; outside the cloud giants, firms like GM and Cognizant are reworking plans with new AI use and restructuring charges.