Why did only Google win in the earnings report showdown among tech giants?

Release Time：2026-04-30

On April 29th, the same day, the four tech giants, Google, Meta, Microsoft and Amazon, all released their financial reports, and all exceeded Wall Street's expectations. However, the market only rewarded one of them.

Alphabet's share price soared by more than 7% after the market closed on Wednesday (April 29), emerging as the sole winner in this earnings season's "Super Bowl". Google Cloud's quarterly revenue rose by 63% year-on-year to $20 billion, with its backlog of orders nearly doubling to $46.2 billion, providing a clear return logic for its huge capital expenditures. CEO Sundar Pichai said on the earnings call: "Our AI investments and full-stack approach are lighting up every corner of our business."

Meanwhile, Meta's shares dropped by more than 7% after the market closed, while Microsoft and Amazon each fell by about 2%. The common predicament for the three companies is that their capital expenditures have risen sharply, but the growth rate of their cloud businesses either failed to meet expectations or merely matched them. Investors' concerns about whether the AI investments can translate into visible returns have clearly intensified.

Analysts point out that the core divergence of this earnings season does not lie in whose performance is better, but rather in whose spending is more convincing. This also reflects the market's re-examination of the AI narrative of tech giants - investments supported by orders are rewarded, while money-burning without a clear path to monetization is punished.

Google: Cloud business booms, AI investment gains recognition

Alphabet's core highlights this quarter were concentrated on Google Cloud.

The financial report shows that the revenue of the cloud business increased by 63% year-on-year to 20 billion US dollars, with an operating profit margin of 33%, far exceeding market expectations. More importantly, the backlog of orders for Google Cloud nearly doubled compared to the previous quarter, reaching 46.2 billion US dollars. The demand for AI and the sales of tensor processing units (TPUs) were the main driving forces.

This figure provides direct endorsement for Alphabet's upward revision of its capital expenditure plan. The company has raised its full-year capital expenditure guidance from the previous range of $175 billion to $185 billion to $180 billion to $190 billion, and hinted that capital expenditure will "increase significantly" in 2027.

Investors are so enamored with the growth of Google Cloud that they are willing to overlook Alphabet's raised capital expenditure forecast. Jake Behan, director of Direxion Capital Markets, noted in a report: "Alphabet's investment has paid off as it is backed by a $460 billion backlog of orders."

Chief Financial Officer Anat Ashkenazi said on the conference call:

Our internal and external demand for AI computing power resources is at an unprecedented level. Pichai also added, "If we could meet the demand, our cloud business revenue could have been even higher."

The advertising business was also solid. Search advertising revenue rose 19% year-on-year to $60.4 billion, YouTube advertising revenue increased 11% to nearly $10 billion, and subscription, platform and device business revenue grew 19% to $12.4 billion.

Amazon and Microsoft: Focus on the Growth Rate of Cloud Business

Unlike Alphabet's smooth sailing, Amazon and Microsoft's cloud businesses have performed steadily, but have failed to fully meet the market's extremely high expectations.

In a post-earnings report, Jefferies analyst Brent Thill wrote that although Amazon's AWS accelerated to a 28% growth rate this quarter, the result was slightly below the target of 28% to 30%.

UBS analyst Stephen Ju also pointed out that AWS's 28% growth was lower than the 32% expected by UBS and over 30% expected by investors respectively, which will drag down the stock price in the short term.

However, Amazon's strong performance in e-commerce and advertising, along with its optimistic guidance for the second quarter, provided some support for its share price.

For Microsoft, although it reported a 5 million increase in paid Copilot subscriptions quarter-on-quarter, the 39% revenue growth of Azure only met expectations.

Barclays analyst Raimo Lenschow believes that Microsoft's first-quarter results were solid but lacked any major surprises.

He pointed out that Azure's steady growth (39% on a constant currency basis) compared with the significant acceleration of AWS (28%) and GCP (63%) might trigger further debate in the market.

In addition, Microsoft plans to invest $190 billion in capital expenditure this year, which is lower than the market expectation of $38 billion. This may raise questions about its AI momentum.

Meta: Soaring Capital Expenditure Raises Concerns

Meta is in an even more awkward situation.

Analysis points out that although its revenue in the first quarter increased by 33%, exceeding expectations, this is still not enough to justify its increased capital expenditure in the eyes of investors.

Meta now plans to spend between $125 billion and $145 billion in 2026, higher than its previous forecast of $115 billion to $135 billion. Unlike the other three hyperscale cloud computing companies, Meta does not sell AI computing cloud services to customers.

UBS analyst Esha Vaish pointed out that the increase in capital expenditure guidance and the in-line second-quarter revenue guidance offset the positive impact of better-than-expected first-quarter revenue and profits, thus dragging down the stock price. Investors will closely watch the data points on its product development (such as the business chatbot/Meta AI) and the reasons for the increased capital expenditure budget.

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