Tech giants double down on AI as earnings reveal growth gains and rising costs
Big Tech's multi-billion dollar AI bets are still on track as the Mag 7 giants report earnings. The four companies—Microsoft (MSFT), Alphabet (GOOG), Meta (META), and Amazon (AMZ)—reported quarterly results on Wednesday, showing they are on track to meet their massive artificial intelligence spending targets this year. Their combined market cap is approximately $12 trillion. Bridgewater Associates previously flagged that these companies are expected to spend roughly $650 billion together on AI infrastructure in 2026. While most companies did not break out their AI spending in their latest earnings, they seem committed to continuing their spending spree in the sector.
The investment has significant implications for the digital asset sector, particularly for bitcoin miners. These miners are increasingly pivoting from mining toward hosting computers for AI as part of their revenue diversification strategy. Bitcoin miners already have data centers ready and powered up to host massive amounts of machines needed for AI computing. Facing margin squeeze from lower bitcoin prices and increased competition, miners have started lending their data centers to AI firms to diversify revenue streams. AI-linked bitcoin mining stocks with exposure to hyperscaler infrastructure deals include IREN (IREN), TeraWulf (WULF), and Cipher Digital (CIFR), which fell slightly in after-hours trading.
Microsoft reported fiscal Q3 2026 revenue of $82.9 billion, beating the $81.4 billion consensus, with EPS of $4.27 against the $4.06 estimate. CEO Satya Nadella emphasized that Microsoft’s AI business brought in $37 billion, up 123% year-over-year, focusing on cloud and AI infrastructure to empower businesses in the agentic computing era.
Alphabet reported capital expenditures of $35.67 billion for the quarter, slightly below estimates of $36.39 billion. CEO Sundar Pichai linked gains in Search and Cloud to AI-driven demand, with Google Cloud revenue rising 63% to $20 billion, driven by enterprise AI solutions and infrastructure.
Amazon reported Q1 2026 revenue of $181.5 billion, beating the $177.2 billion consensus, with EPS of $2.78 against the $1.63 estimate. AWS revenue came in at $37.6 billion, and Amazon noted a sharp decline in free cash flow over the past year due to increased infrastructure spending, primarily driven by AI investments.
Meta reported $19.84 billion in capital expenditures for the quarter, raising its full-year outlook to $125–$145 billion, up from its prior guidance of $115–$135 billion. CEO Mark Zuckerberg framed the push as a milestone quarter tied to AI progress, calling it a step toward delivering personal superintelligence to billions of people.
Bitcoin was down about 0.9% in the last 24 hours, while Microsoft was down over 2.4%, Alphabet up 6%, Meta down 6.6%, and Amazon down 3.7% in after-hours trading. The next big test for overall market sentiment and miners will come when chipmaker Nvidia reports earnings on May 20.
Source: CoinDesk