--- title: "Earnings Insights from the \"Tech Giants\"" type: "News" locale: "en" url: "https://longbridge.com/en/news/284886540.md" description: "Google Cloud's backlog surged by $219 billion in a single quarter, nearly doubling, while TPU chip sales to external customers open up a new battlefield. AWS backlog exceeded expectations with a $120 billion increase, and growth continues to accelerate. The combined quarter-end backlog of the three cloud providers surpassed $1.5 trillion. Morgan Stanley believes that the revenue acceleration of hyperscale cloud providers is becoming the most important validation signal for the return on invested capital (ROIC) of generative AI investments this year" datetime: "2026-05-01T10:51:36.000Z" locales: - [zh-CN](https://longbridge.com/zh-CN/news/284886540.md) - [en](https://longbridge.com/en/news/284886540.md) - [zh-HK](https://longbridge.com/zh-HK/news/284886540.md) --- # Earnings Insights from the "Tech Giants" Three tech giants released their earnings reports on the same night, with the explosive growth in cloud business prompting Wall Street to reprice the commercial returns of AI. According to Zhuifeng Trading Desk, on April 30, Morgan Stanley analyst Brian Nowak's team published research interpreting the latest earnings reports of Alphabet (Google's parent company), Amazon, and Meta. They stated that **the revenue acceleration of hyperscale cloud providers is becoming the most important validation signal for the return on invested capital (ROIC) of generative AI investments this year.** ## Google Cloud: Backlog Doubles, TPU Chip Sales Become a New Narrative Google Cloud was the biggest surprise of this earnings season. Quarterly revenue grew 63% year-over-year, exceeding buy-side expectations of 60%. The growth came from two drivers: first, a significant month-over-month increase in paid monthly active users for Gemini Enterprise, with over 16 billion tokens processed per minute via direct APIs; second, sustained strong demand for AI infrastructure, as Google continued to sell TPUs and GPUs to external customers. Even more striking were the backlog figures. Google Cloud's quarter-end backlog jumped from $243 billion to $462 billion, **a net increase of $219 billion in a single quarter, nearly doubling**. Morgan Stanley pointed out that this was driven by large private laboratory contracts and Google's sales of TPU chips to third parties. Selling TPUs to external customers is a new variable. Morgan Stanley estimates that, depending on the volume and unit price of chip sales, TPUs may have contributed between $20 billion and $100 billion to this quarter's backlog (with a base case assumption of approximately $55 billion). This means Google is not just a cloud service provider but is also selling computing power hardware externally—a logic previously viewed as a "bull case assumption" has now become the base case scenario. The financial impact is directly reflected in the forecasts: Morgan Stanley raised its revenue forecasts for Google Cloud in 2026 and 2027 by approximately 11% and 40%, respectively, expecting growth rates of 78% and 86%. Looking further ahead, under the current model, Google Cloud's EBIT contribution as a percentage of the company's total EBIT is expected to exceed 50% in 2029 and reach 64% in 2030. Based on this, Morgan Stanley raised Google's target price from $330 to $375, corresponding to a P/E ratio of 24 times based on an expected EPS of approximately $15.74 in 2027, maintaining an "Overweight" rating. The 2027 EPS forecast was simultaneously raised by 14% to approximately $16. ## AWS: Growth Misses Expectations, but Backlog Indicates Stronger Future AWS grew 28% year-over-year this quarter, below the buy-side expectation of around 30%, which was a relatively "disappointing" aspect of this earnings report. However, Morgan Stanley reminded investors not to focus solely on the quarterly figures. AWS accelerated by approximately 480 basis points compared to the previous quarter, and changes in the backlog are more telling: the quarter-end backlog increased from $244 billion to $364 billion, **a net increase of $120 billion in a single quarter**, exceeding Morgan Stanley's previous forecast of approximately $350 billion. This was mainly driven by large private laboratory contracts and new business. Morgan Stanley predicts that as capacity is gradually released, AWS growth will further accelerate, reaching 35% and 36% in 2026 and 2027, respectively. Amazon's retail business also exceeded expectations: North American EBIT in the first quarter was about $1 billion higher than expected, with unit growth of approximately 15% year-over-year, beating expectations by about 400 basis points. Fulfillment and delivery costs were 2% lower than expected. Combining cloud business and retail, Morgan Stanley raised its 2027 EPS forecast for Amazon by approximately 9% to about $11.3, and raised the target price from $300 to $330, corresponding to a P/E ratio of approximately 29 times, maintaining an "Overweight" rating. ## Capital Expenditure: To Exceed $1 Trillion in 2027 Behind the rapid growth of cloud business lies continuously increasing capital expenditure. Morgan Stanley's latest forecast predicts that the combined capital expenditure of the five major hyperscale cloud providers (Amazon, Google, Meta, Microsoft, and Oracle) will be approximately $800 billion in 2026 and will exceed $1.1 trillion in 2027, raised again from the previous forecast of $950 billion. Specifically for individual companies: Google raised its 2026 capital expenditure cap by $5 billion; Morgan Stanley predicts that Google's and Amazon's data center capital expenditures in 2027 will reach $300 billion and $225 billion, respectively. The logic behind this spending is: heavy upfront investment to build capacity, followed by recovery through scaled revenue and ROIC. The surge in backlog is the most direct evidence that this logic is working. ## META: Stable Advertising, but Lacks the Cloud Business Card Meta's situation differs from that of Google and Amazon. First-quarter revenue was $5.631 billion, slightly below the expected $5.676 billion, but core advertising metrics continued to improve: Facebook video watch time increased by over 8% quarter-over-quarter, the largest increase in four years; Instagram Reels watch time rose by 10%; the global average ad price per impression increased by 12% year-over-year; and ad impressions grew by 19% year-over-year. Adjusted EBITDA margin reached 62%, far exceeding the expected 56.3%. However, Morgan Stanley pointed out that Meta lacks high-growth businesses like Google Cloud or AWS that can directly demonstrate the return on AI investment, and also lacks forward revenue visibility. Therefore, whether Meta's stock price can be further revalued depends on whether new products driven by Muse (such as personal AI shopping assistants) can achieve commercialization, as well as changes in user adoption rates and payment behaviors. Morgan Stanley also mentioned that internal memos at Meta show management plans to lay off approximately 10% of employees (about 8,000 people) and close about 6,000 vacant positions (equivalent to reducing headcount by another 8%). For every 10% reduction in staff, it is estimated that 2027 EPS will increase by approximately $0.50 to $1.50. Currently, Morgan Stanley's base case forecast for Meta's 2027 EPS is approximately $34, with a target price of $775, corresponding to a P/E ratio of about 23 times, maintaining an "Overweight" rating. ## Cloud Market Landscape: Google's Quarterly Revenue Increase Surpasses AWS and Azure for the First Time Looking at quarterly revenue increase as a "barometer of market share," Google Cloud added $2.3 billion in the first quarter, AWS added $2.0 billion, and Azure added $1.9 billion. This is a noteworthy signal: Google Cloud's quarterly revenue increase surpassed both AWS and Azure for the first time. The combined quarter-end backlog of the three cloud providers has exceeded $1.5 trillion, sending a clear signal of sustained demand growth. ### Related Stocks - [GOOGL.US](https://longbridge.com/en/quote/GOOGL.US.md) - [GOOG.US](https://longbridge.com/en/quote/GOOG.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) - [MS.US](https://longbridge.com/en/quote/MS.US.md) - [AMZN.US](https://longbridge.com/en/quote/AMZN.US.md) - [META.US](https://longbridge.com/en/quote/META.US.md) - [MSFT.US](https://longbridge.com/en/quote/MSFT.US.md) - [ORCL.US](https://longbridge.com/en/quote/ORCL.US.md) - [MS-O.US](https://longbridge.com/en/quote/MS-O.US.md) - [MS-Q.US](https://longbridge.com/en/quote/MS-Q.US.md) - [MS-E.US](https://longbridge.com/en/quote/MS-E.US.md) - [MS-I.US](https://longbridge.com/en/quote/MS-I.US.md) - [MS-L.US](https://longbridge.com/en/quote/MS-L.US.md) - [MS-P.US](https://longbridge.com/en/quote/MS-P.US.md) - [MS-A.US](https://longbridge.com/en/quote/MS-A.US.md) - [MS-F.US](https://longbridge.com/en/quote/MS-F.US.md) - [MS-K.US](https://longbridge.com/en/quote/MS-K.US.md) - [ORCL-D.US](https://longbridge.com/en/quote/ORCL-D.US.md) ## Related News & Research - [Alphabet (GOOGL) Q1 Earnings Today. 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