AI spending pays off? Alphabet, Amazon, Microsoft and Meta post robust earnings

The US markets closed broadly unchanged on Wednesday after the Federal Reserve kept the interest rates unchanged. However, much of the activity happened after the closing hours, when megacap titans like Alphabet, Amazon, Meta and Microsoft published their quarterly earnings in after-market hours. The results were in the key focus as investors look for tangible returns from the massive AI and related infrastructure investments. Here is how these four megacap companies performed in their quarterly earnings, and whether the massive AI spending has led to any sizable outcomes.

Alphabet

Shares of Alphabet, the parent company of Google, jumped over 7% in the extended trading hours, the most among the four, after the company released its quarterly earnings report. The company posted a revenue growth of $109 billion, up 22% YoY. The EPS of $5.1beat the consensus estimates on investing.com of $2.11 per share. The key catalyst was Google Cloud, which clocked the revenue of $20 billion, up 63% YoY. The advertising business still remains to be the dominant contributor to the topline at $77 billion, which rose by ~16% YoY.

The buoyancy is led by the structural shift in the cloud business model. AI enterprise solutions were the primary driver for the Google Cloud Division as users embedded enterprise level AI into workflows. Notably, Google’s cloud backlog nearly doubled to $462 billion, led by demand from AI and TPU hardware sales.

Amazon

Amazon also led the bandwagon of tech growth in the first quarter earnings. The company posted a 17% YoY jump in revenue at $181.5 billion, primarily led by the AWS business. The cloud business is now at a $150 billion annualised revenue run rate, with quarterly revenue jumping 28% YoY to $37.6 billion. The growth, which was also the fastest in three years, was primarily led by increased AI spending and migrations.

The core e-commerce segment posted a revenue jump of 12% YoY at $63 billion, and the advertising revenue jumped 24% YoY to $17.2 billion.The consolidated EPS for the quarter stood at $2.78, beating consensus estimates of $1.64 per share.For the ongoing quarter, the company expects to clock the revenue between $194 billion and $199 billion.

Microsoft

Microsoft posted a revenue growth of 18% YoY to ₹82.9 billion, beating the analyst estimates of $81 billion. Similar to Alphabet and Amazon, Microsoft’s cloud business also witnessed robust growth during the quarter. The overall Microsoft cloud business jumped 29% YoY to $54.5 billion. The AI business clocked the revenue of $37 billion, up 123% YoY, which is also the only player breaking out on the AI revenue.

Commenting on the results, CEO Satya Nadella said,” We are focused on delivering cloud and AI infrastructure and solutions that empower every business to excel in their outcomes in the agentic computing era”.

After posting robust earnings for the quarter ended March 2026, the company increased their guidance for the coming quarter as it sees revenue to hit $86.7 billion for the fourth quarter of FY26.

Meta

Meta shares were the only outlier, with their shares plunging 6% in the extended trading session, despite the revenue and net income being above the analyst estimates. The social media company posted a revenue growth of 33% YoY to $56 billion and a net income of $26.9 billion. However, investor sentiment soured as the total active user base, a crucial metric tracked by analysts and investors, witnessed a slight sequential decline.

AI capex on the roll

Apart from the robust quarterly earnings, the capex guidance was the most widely tracked metric by investors and analysts as as investors remain cautious on the tangible outcome of these capital expenditure investments in AI infrastructure. Contrary to the larger belief, the companies looked more confident about AI and its related spending with outcome visible in latest earnings report.