Microsoft, Meta, and Google just announced billions more in AI spending—and only one got punished
Microsoft, Meta Platforms, and Google parent Alphabet announced billions more in AI spending, with significant shifts in stock performance and business growth. Alphabet’s Google Cloud revenue grew 63% year-over-year to $20 billion, with a backlog of $462 billion—nearly doubling quarter-over-quarter. CEO Sundar Pichai highlighted strong deal momentum, including $1 billion-plus contracts with brands like Bosch and Merck, and revenue growth of nearly 800% year-over-year from GenAI products. Alphabet raised its 2026 capex guidance to $180 billion–$190 billion, with CEO Ashkenazi emphasizing AI compute demand as a key driver of growth.
Meta Platforms, meanwhile, guided capex spending to $125 billion–$145 billion, up from $115 billion–$135 billion. CEO Mark Zuckerberg’s response to investor questions about AI ROI was vague, leaving markets skeptical. While Meta’s stock dropped 6% after hours, Alphabet’s shares rose nearly 7%, reflecting investor confidence in Google Cloud’s competitive edge.
Microsoft’s capex spending exceeded $40 billion in Q4, with $190 billion total for the year, split between GPUs/CPUs and higher component pricing. CFO Amy Hood noted AI tools like M365 Copilot have better profit margins than cloud services at similar stages. Microsoft’s Azure cloud grew 40%, though it did not disclose specific revenue figures. Analysts noted Alphabet’s cloud business outperformed competitors like AWS ($37.6 billion in Q1) and Microsoft Azure ($54.5 billion), driven by AI-driven demand and Gemini Enterprise’s rapid adoption.
Investors remain cautious about AI capex returns, with analysts seeking clearer signals from CEOs. Alphabet’s cloud backlog of $462 billion suggests strong long-term potential, while Meta’s cautious approach contrasts with Alphabet’s aggressive growth narrative. Microsoft’s AI investments, though substantial, face capacity constraints through 2026.
Source: Fortune