Almost simultaneously, the four largest hyperscalers, i.e. Alphabet, Amazon, Meta and Microsoft, presented their financial reports. They tell very similar stories and dispel doubts that arose a quarter ago, when the same four announced annual infrastructure spending totaling around $650 billion.
One of the biggest doubts was whether, over time, these companies would slow down their planned investments in data centers. It turned out that not only do they have no intention of reducing their scale, but they assume that they will spend even more.
| Previous CAPEX 2026 announcement | Current CAPEX 2026 announcement | Change | |
|---|---|---|---|
| Microsoft |
approximately USD 155 billion |
$190 billion |
+$35 billion |
| Amazon |
$200 billion |
$200 billion |
$0 billion |
| Meta |
USD 115–135 billion |
USD 125–145 billion |
+$10 billion |
| Alphabet |
USD 175–185 billion |
USD 180–190 billion |
+$5 billion |
| Together |
USD 645–675 billion |
USD 695–725 billion |
+$50 billion |
During the Meta and Google conferences, there was official confirmation of an increase in investment spending by USD 10 billion, respectively. and USD 5 billion In the case of Microsoft, the situation is a bit more complicated, because no specific forecast was made during the company's previous report, but analysts' estimates were around USD 150-155 billion. Now Microsoft's management said about USD 190 billion.an amount comparable to Alphabet and slightly lower than Amazon.
Interestingly, Meta and Microsoft are the reason for the increase in infrastructure spending forecasts directly cited higher component costs, especially computer memory. Amazon, although sticking to its previous forecasts, also mentioned the sharp increase in hardware prices as a risk factor – so for now it is still at $200 billion, but the situation may change in the coming quarters and, taking into account the movements of the competition, it will not be a change towards reducing investments unless it is absolutely necessary.
The most satisfied with this turn of events are certainly memory producers, who test the endurance of customers with subsequent price increases. For now, it turns out that customers prefer to withdraw billions of dollars from their wallets rather than take even a step back.
Record cloud revenues are expected to finance further record investments
Where does this determination come from? The answer is easy to find in the statements of the executives of the three largest cloud service providers:
— In the short term, we are limited in terms of computing power. And as an example: Our cloud revenues would be higher if we were able to meet this demand said Alphabet's Sundar Pichai.
“We added another gigawatt of capacity this quarter and remain on track to double the scale of our infrastructure in just two years. We are moving aggressively to expand capacity in ways consistent with the demand signals we are seeing – said Satya Nadella from Microsoft
— Today, AWS is a business with annual revenues of $150 billion. It is extremely rare for a company to grow so quickly with such a large base. We've never seen technology evolve as quickly as AI – says Andy Jassy from Amazon.
These words are confirmed by numbers:
| Segment/indicator | Q1 2026 revenues | Year-on-year growth | |
|---|---|---|---|
| Alphabet |
Google Cloud – revenues |
USD 20.02 billion |
+63 percent |
| Amazon |
Amazon Web Services – revenues |
USD 37.6 billion |
+28 percent |
| Microsoft |
Azure – revenue |
USD 30.9 billion |
+40 percent |
In short, revenues from cloud services of these companies are growing at a very fast pace. In addition, they would grow faster if hyperscalers had more data centers.
The latter is indicated, among others the level of contracts already signed, the revenues from which have not yet been recognized in the financial results. At Alphabet, Microsoft and Amazon they amount to hundreds of billions of dollars:
| Alphabet Google Cloud backlog |
approx. USD 462 billion |
|---|---|
| Amazon AWS RPO |
approx. USD 364 billion |
| Microsoft RPO |
approx. USD 627 billion |
In the case of AWS, the above figure does not include the contract with Anthropic, the value of which, if fully implemented, may exceed USD 100 billion.
AI agents are the driving force of growth
These companies feel it firsthand avalanche increase in demand for computing power generated by AI agents – especially those related to programming and services like Anthropic's Claude Code and OpenAI's Codex.
It is still questionable whether all the contracts mentioned above will be fully implemented and how long it will take to find power for all these data centers, but currently, from the point of view of their operators, continuing to keep their foot on the gas pedal looks very sensible.
The market reacted calmly to these announcements. Previously, investors often asked how and when the return on all these investments would appear, which made them react nervously to information about subsequent records in infrastructure spending. Now they seem to have found the path to these returns much easier to see than just a few months ago.
Meta Exception Mark Zuckerberg – CEO of Meta and founder of Facebook
|
FotoField / Shutterstock
The only exception here is Meta, on whose financial statements the market reacted with declines on the stock exchange, which is the opposite situation to the one we saw a quarter ago.
Meta's revenues increased by over 30%.so you can see that Mark Zuckerberg's advertising empire is doing well and the use of artificial intelligence continues to contribute to its development. Now, however, investors are increasingly wondering what Meta intends to do with all this new computing power, because they do not fully believe that the company's advertising business itself needs so much of it.
The general assumption is that since Meta does not sell its computing power to others, then The time is coming when it should start somehow monetizing access to its language modelsh, such as the potential next-generation Llama or the recently announced Muse Spark.
