--- title: "Tech Giants' Earnings Showdown: Why Did Only Alphabet Win?" type: "News" locale: "en" url: "https://longbridge.com/en/news/284686441.md" description: "The core reason lies in Google Cloud's 63% revenue surge, with its backlog nearly doubling to $46.2 billion, providing a clear return logic for its massive AI capital expenditures. In contrast, the other three companies sparked concerns due to cloud growth falling short of expectations or lacking monetization paths. The market logic is clear: it rewards AI investments backed by orders and penalizes cash burn without monetization" datetime: "2026-04-30T03:30:33.000Z" locales: - [zh-CN](https://longbridge.com/zh-CN/news/284686441.md) - [en](https://longbridge.com/en/news/284686441.md) - [zh-HK](https://longbridge.com/zh-HK/news/284686441.md) --- # Tech Giants' Earnings Showdown: Why Did Only Alphabet Win? On April 29, four tech giants—Alphabet, Meta, Microsoft, and Amazon—all released their earnings reports, beating Wall Street expectations. However, the market rewarded only one of them. Alphabet's stock surged more than 7% in after-hours trading on Wednesday (April 29), **becoming the sole winner of this earnings season "Super Bowl."** Google Cloud's quarterly revenue grew 63% year-over-year to $20 billion, while its backlog nearly doubled to $46.2 billion, providing a clear return logic for its massive capital expenditures. CEO Sundar Pichai stated on the earnings call: "**Our AI investments and full-stack layout are illuminating every corner of our business.**" Meanwhile, Meta dropped more than 7% in after-hours trading, while Microsoft and Amazon each fell about 2%. The common dilemma for these three companies was that **capital expenditures soared, but cloud business growth either fell short of expectations or merely met them, significantly heightening investor doubts about whether AI investments could translate into visible returns.** **** Analysts pointed out that the core divergence in this earnings season was not about who had better performance, but whose spending was more compelling. This also reflects the market's re-evaluation of the AI narrative among tech giants: investments backed by orders are rewarded, while cash burn lacking monetization paths is punished. ## Alphabet: Cloud Business Boom, AI Investments Recognized Alphabet's core highlights this quarter were concentrated in Google Cloud. The earnings report showed that cloud business revenue grew 63% year-over-year to $20 billion, with an operating profit margin of 33%, far exceeding market expectations. More importantly, Google Cloud's backlog nearly doubled from the previous quarter to $46.2 billion, driven primarily by AI demand and Tensor Processing Unit (TPU) hardware sales. This figure provided direct endorsement for Alphabet's upward revision of its capital expenditure plan. **The company raised its full-year capital expenditure guidance from the previous $175 billion–$185 billion to $180 billion–$190 billion, hinting that capital expenditures in 2027 would "increase substantially."** **Investors were so captivated by Google Cloud's growth that they were willing to overlook Alphabet's raised capital expenditure expectations.** Jake Behan, Director of Capital Markets at Direxion, noted in a report: "Alphabet's investments are paying off because they are backed by a $46 billion order backlog." CFO Anat Ashkenazi stated on the conference call: > "Internal and external demand for our AI computing resources is at an unprecedented level." Pichai added, "If we could meet the demand, cloud business revenue could have been even higher." **The advertising business remained robust as well.** Search advertising revenue grew 19% year-over-year to $60.4 billion, YouTube advertising revenue increased 11% to nearly $10 billion, and subscriptions, platforms, and devices business grew 19% to $12.4 billion. ## Amazon and Microsoft: Cloud Growth Becomes the Focus Unlike Alphabet's smooth sailing, Amazon and Microsoft's cloud businesses performed steadily but failed to fully meet the market's extremely high expectations. Jefferies analyst Brent Thill wrote in a post-earnings report that **although Amazon's AWS accelerated to 28% growth this quarter, the result was slightly below the target range of 28% to 30%.** UBS analyst Stephen Ju also pointed out that AWS's 28% growth was lower than UBS's expectation of 32% and investors' expectation of over 30%, which would weigh on the stock price in the short term. > However, Amazon's strong performance in e-commerce and advertising, along with optimistic guidance for the second quarter, provided some support for the stock price. **As for Microsoft,** despite reporting a sequential increase of 5 million paid Copilot subscriptions, Azure's 39% revenue growth only met expectations. Barclays analyst Raimo Lenschow believed that **Microsoft's first-quarter performance was steady but lacked major surprises.** He pointed out that Azure's stable growth (39% at constant currency) compared to the significant acceleration of AWS (28%) and GCP (63%) might trigger further market debate. > Furthermore, Microsoft plans to spend $190 billion on capital expenditures this year, which is lower than the market expectation of $380 billion, potentially raising questions about its AI momentum. ## Meta: Surge in Capital Expenditures Sparks Concerns Meta's situation was even more awkward. Analysis indicated that although its first-quarter revenue grew 33%, exceeding expectations, this was not enough to justify its increased capital expenditures in the eyes of investors. **Meta now plans to spend $125 billion to $145 billion in 2026, higher than the previous expectation of $115 billion to $135 billion.** Unlike the other three hyperscale cloud computing companies, Meta does not have a cloud business selling AI computing to customers. UBS analyst Esha Vaish pointed out that **the increase in capital expenditure guidance and the second-quarter revenue guidance meeting expectations offset the positive impact of first-quarter revenue and profit beating expectations,** thereby dragging down the stock price. Investors will closely monitor data points on its product development (such as commercial chatbots/Meta AI) and the rationale for increasing the capital expenditure budget. ### Related Stocks - [GOOG.US](https://longbridge.com/en/quote/GOOG.US.md) - [GOOGL.US](https://longbridge.com/en/quote/GOOGL.US.md) - [CLOU.US](https://longbridge.com/en/quote/CLOU.US.md) - [DTCR.US](https://longbridge.com/en/quote/DTCR.US.md) - [GGLL.US](https://longbridge.com/en/quote/GGLL.US.md) - [GOOW.US](https://longbridge.com/en/quote/GOOW.US.md) - [META.US](https://longbridge.com/en/quote/META.US.md) - [MSFT.US](https://longbridge.com/en/quote/MSFT.US.md) - [AMZN.US](https://longbridge.com/en/quote/AMZN.US.md) - [JEF.US](https://longbridge.com/en/quote/JEF.US.md) - [UBS.US](https://longbridge.com/en/quote/UBS.US.md) - [BCS.US](https://longbridge.com/en/quote/BCS.US.md) - [BARC.UK](https://longbridge.com/en/quote/BARC.UK.md) ## Related News & Research - [Google’s Run Faces Tight Risk-Reward as Earnings Loom](https://longbridge.com/en/news/284535773.md) - [Alphabet's (GOOGL) $40B Anthropic Gambit: Why Google Is Doubling Down on Its Biggest Al Rival](https://longbridge.com/en/news/284085625.md) - [Investors still trust Google more than Meta when it comes to spending their money on AI](https://longbridge.com/en/news/284668897.md) - [BUZZ-Street View: Google Alphabet flips the AI narrative, emerging as big tech's full-stack winner](https://longbridge.com/en/news/284723458.md) - [Google gets pointers from EU regulators on helping AI rivals access services](https://longbridge.com/en/news/284248321.md)