Big Tech capex hits $650bn as AI revenue materializes
microsoft, alphabet, meta, and amazon committed $630-650b for 2026 ai infrastructure. azure grew 40%, google cloud surged 63%, and microsoft cloud hit $54.5b. despite revenue validation, all four firms raised capex forecasts, signaling continued heavy investment.
Major US tech firms reported Q1 earnings confirming that massive AI infrastructure investments are driving revenue growth, but signaled even higher spending ahead. Microsoft led with Azure growing 40% and annual AI revenue surpassing $37 billion, while Alphabet's Google Cloud revenue surged 63% and Meta achieved its fastest revenue growth since 2021.
Despite these operational beats, all four companies raised capital expenditure guidance for 2026. Microsoft increased its forecast to $190 billion, Alphabet lifted its range to $180-190 billion, and Meta raised its outlook to $125-145 billion. Management cited compute constraints and accelerating demand, with Alphabet explicitly stating it is 'compute constrained in the near term.'