Big Tech AI Earnings: Alphabet Leads Cloud Growth Surge

Earnings reports released this week by Alphabet, Amazon, Meta and Microsoft reveal a landscape of aggressive expansion of AI infrastructure and capacity. 

While all four giants posted double-digit revenue growth, Alphabet emerged as the quarter’s standout performer in the enterprise sector, signalling a potential shift in the hierarchy of the cloud computing market.

Alphabet’s cloud breakthrough

Alphabet stole the spotlight with 63% revenue growth in Google Cloud, reaching US$20bn for the quarter. 

This acceleration – significantly outpacing its rivals – was fuelled by the intense demand for Google’s AI approach, including its proprietary Gemini models and custom AI infrastructure, which are processing more than 16 billion tokens per minute, up 60% from last quarter. 

Perhaps most telling of Google’s momentum is its massive backlog, which nearly doubled quarter-on-quarter to a staggering US$460bn.

Sundar Pichai, CEO of Alphabet and Google, says: “2026 is off to a terrific start. Our AI investments and full stack approach are lighting up every part of the business. 

“This was our strongest quarter ever for our consumer AI plans, driven by the Gemini App. 

“Overall the number of paid subscriptions has now reached 350 million, with YouTube and Google One being the key drivers. Gemini Enterprise has great momentum with 40% quarter on quarter growth in paid monthly active users. 

“And, finally, I’m pleased to see Waymo surpass 500,000 fully autonomous rides a week. These outstanding results are built on our differentiated, full stack approach. 

“It’s really exciting to see how our AI investments are delivering value for our users, customers and business.” 

Amazon’s custom silicon

Not to be outdone, Amazon reported its fastest AWS growth in nearly four years, with sales climbing 28% to US$37.6bn. 

However, the real story for Amazon lies in its hardware. 

The company’s custom AI chips – Graviton and Trainium – have reached a US$20bn annual revenue run rate, growing at triple-digit percentages.

Some have reported Amazon as positioning itself as the “Switzerland” of AI since it now offers everything from its own chips to massive deployments of NVIDIA GPUs and hosting models from both OpenAI and Anthropic. 

This came at a cost, though, with Amazon’s free cash flow plummeting to US$1.2bn, down from US$25.9bn a year ago, as the company poured US$59.3bn into property and equipment, primarily for AI data centres.

“AWS is growing 28% (our fastest growth in 15 quarters) on a very large base," notes Andy Jassy, Amazon President and CEO. 

“We’re in the middle of some of the biggest inflections of our lifetime, and we’re well positioned to lead.”

Meta: from social media to superintelligence

Meta delivered the highest top-line growth of the group, with revenue jumping 33% to US$56.3bn. 

While advertising remains the engine, CEO Mark Zuckerberg has shifted the company’s entire identity toward Meta Superintelligence Labs, a new division that specialises in AI R&D.

The company’s capital expenditure outlook is the boldest in the industry, with 2026 projections raised to US$145bn to support AI capacity. 

Despite this spending, Meta’s operating margin remained a robust 41%, bolstered by a 19% increase in ad impressions.

“We had a milestone quarter... with the release of our first model from Meta Superintelligence Labs,” says Mark Zuckerberg, Meta founder and CEO.

“We’re on track to deliver personal superintelligence to billions of people.”

Microsoft scales through the margin squeeze 

Microsoft saw a healthy 18% revenue increase, driven by the continued scaling of the Microsoft Cloud. 

However, the costs of the AI race are beginning to show in the margins. The company’s cloud gross margin percentage ticked down to 68%, a result of the investment required to build out AI infrastructure.

Microsoft also felt the volatility of the startup ecosystem; its net income was dragged down by a US$3.1bn loss related to its investments in OpenAI. 

Nevertheless, the company remains the primary gateway for enterprise AI through its Microsoft 365 Copilot and Azure integrations.

“We are focused on delivering AI infrastructure and solutions that empower every business to eval-max their outcomes in this agentic computing era,” writes Satya Nadella, Chairman and CEO of Microsoft, on LinkedIn.

“Our AI business surpassed a US$37bnn annual revenue run rate, up 123%.

“We are at the beginning of one of the most consequential platform shifts that will change the entire tech stack as we move from end-user driven workloads to workloads driven by end-users and agents.

“This will drive TAM expansion and change the value creation equation across the entire economy.”

To capture this opportunity, Microsoft will continue to build its own AI infrastructure, having added another gigawatt of capacity this quarter.

Its aim is to double its footprint in two years.