Four of the Magnificent Seven reported first-quarter 2026 results on Wednesday 29 April, delivering broadly strong revenue growth and accelerating cloud demand, though market reactions diverged sharply on the question of AI spending.
Revenue grew 22% at Alphabet to $109.9bn, 18% at Microsoft to $82.9bn, 17% at Amazon to $181.5bn and 33% at Meta to $56.3bn.
Matt Britzman, senior equity analyst at Hargreaves Lansdown, said: “Big Tech results gave investors plenty to chew over, but the broad message was hard to miss as AI moves from promise to profit engine.
“Growth was strong across the group, cloud demand accelerated, and the message from management was clear: the buildout continues.”
Cloud revenue was the clearest indicator of AI demand translating into commercial returns. Alphabet’s Google Cloud grew 63% to $20bn, with its order backlog nearly doubling quarter-on-quarter to more than $460bn. Microsoft Azure grew 40% while Amazon’s AWS posted its fastest growth rate in 15 quarters, rising 28% to $37.6bn.
Meanwhile, Microsoft’s AI business crossed a $37bn annual revenue run rate, up 123% year-on-year. Britzman said the supply constraints visible at both Microsoft and Amazon point to demand that is still running ahead of the industry’s capacity to meet it.
Alphabet drew the strongest market response of the session, with its shares gaining 7%. Google Search revenue grew 19%, defying expectations that AI would erode its core advertising business. Search growth, once considered the business most exposed to AI disruption, is now being read as a direct beneficiary of it after Google integrated AI answers into search results.
“It is almost hard to believe that a year ago, Alphabet was being written off by parts of the market as an AI loser, because today it arguably wears the crown as the strongest full-stack AI option in mega-cap tech, with chips, models, cloud infrastructure, consumer reach and advertising all pulling in the same direction,” Britzman said.
Microsoft and Amazon both reported strong cloud numbers but fell short of the market’s most optimistic expectations. Microsoft’s share closed flat after an initial decline and Amazon rose 3%.
Microsoft remains compute-constrained, with demand it cannot yet service, and Azure’s 40% growth came alongside guidance that signalled further headroom once capacity increases. Shares initially sold off before recovering after management addressed cloud growth on the post-results call.
Britzman said: “This is still a very high-quality business with an image problem rather than a demand problem and it may just take more time for the market to give Microsoft credit for its long list of strengths.”
Amazon faced a narrower version of the same dynamic. AWS grew 28%, narrowly underperforming market expectations. Britzman said the gap did not reflect the underlying health of the business: “28% growth versus hopes for something closer to 30% still points to a cloud business in very good health.”
Amazon’s chips division, covering Graviton, Trainium and Nitro, exceeded a $20bn annual revenue run rate and is growing at triple-digit rates year-on-year.
Meta reported the strongest revenue growth of the four companies but saw the sharpest share price decline, down 7%. Revenue rose 33%, ad impressions increased 19% and the average price per ad rose 12%.
The sell-off was driven by a capital expenditure guidance raise, with Meta’s full-year range moving from $115-135bn to $125-145bn, reflecting higher component costs and additional data centre spending as the firm looks to grow its AI infrastructure.
“Meta simply cannot catch a break and it is perhaps the clearest example from last night of the market treating ‘spending more’ as an automatic negative, even when the underlying business is firing,” Britzman said.
“The capex raise that helped trigger the after-hours sell-off looks relatively modest in context - what’s $10bn among friends when the top end of the guide has only moved from $135bn to $145bn, and Meta is already showing strong returns on the AI spend it has made so far?”
Across all four companies, management guidance pointed to continued investment in AI infrastructure through 2026 and into 2027. “The train has left the station, demand for compute is still running ahead of supply, and with expectations for 2027 capex still looking too low, the AI hardware trade looks like it has further to run,” Britzman finished.