Meta falls behind as Alphabet, Amazon outpace Facebook-parent in AI shift during earnings

Tech giants, including Google-parent Alphabet, Amazon, Microsoft, and Meta, announced their quarterly earnings on Wednesday, with the Facebook and Instagram-parent appearing to fall behind in terms of AI boost.

Alphabet shares jumped more than 7% in the after-trading hours of Wednesday as investors cheered its positive performance and AI spending. Meta shares, meanwhile, crashed 7% in the same period.

Alphabet earnings

The Google-parent's total revenue rose 22% to $109.9 billion in the first quarter, well above an estimate of $107.2 billion, according to LSEG ‌data cited by Reuters. Revenue at Google Cloud grew 63% to $20 billion in the first quarter ended March, highlighting how AI is emerging as a decisive growth engine for Google after years of trailing larger rivals.


The cloud backlog crossed $460 billion, showing long-term enterprise demand. The results highlighted how AI integration across services is expanding revenue streams while the company continues investing heavily in infrastructure and computing capacity.

During an investor call, Alphabet executives said that there were plans to "significantly increase" spending on AI next year, BBC reported. While the Sundar Pichai-led company didn’t mention exactly how much it will spend next year, this year it plans to spend $185 billion, which is more than double what it spent in 2025. "Our enterprise AI solutions have become our primary growth driver for cloud for the first time," CEO Sundar Pichai said on a conference call with analysts, noting that sales on those products grew eightfold from a year ago.

Microsoft earnings

Microsoft on Wednesday meanwhile said that sales at its Azure cloud business would beat Wall Street estimates, while unveiling plans for 2026 capital spending of $190 billion, surpassing expectations. Microsoft now expects to spend $190 billion this calendar year. According to data from Visible Alpha, as quoted by Reuters, this far exceeds analyst forecasts for spending of more than $150 billion.

Microsoft's Chief Financial Officer Amy Hood during a conference call with analysts said that $25 billion of the spending was because of rising costs of components such as chips. "We remain confident in the return on these investments given higher demand signals and increasing product usage," Hood said during the call. Users of the $30 per month M365 Copilot AI assistant rose to 20 million from 15 million disclosed in January, said Jonathan Neilson, Microsoft's vice president of investor relations.

However, concerns around only a small portion of Microsoft Office users paying for the company’s Copilot AI tools, still remains high.

Amazon earnings

On the other hand, Amazon said that its revenue from cloud division grew 28% from a year earlier, marking the fastest growth rate since the second quarter of 2022. Net sales increased 17% to $181.5 billion in the first quarter, compared with $155.7 billion in the year-ago period.

The shares of the company surged nearly 3% in the after trading hours after Bloomberg News reported that Anthropic was considering a fresh funding round at a valuation of more than $900 billion.

Meta earnings

Meta meanwhile failed to meet expectations. Its shares crashed 7% in the after trading hours as the Instagram-parent boosted full-year capital expenditures to $145 billion, partly driven by rising component prices. Meta’s revenue grew 33% YoY to more than $56 billion in the first quarter.

Compared with the biggest AI peers, “Meta’s standalone app hasn’t had the amount of engagement,” Bloomberg quoted analyst Mandeep Singh as saying. “Meta doesn’t have “a very precise plan” for how each AI product will be cultivated, he said on a conference call.

“I think we have a sense of the shape of where things need to be,” Meta CEO Mark Zuckerberg said, while conceding that his answers might be “unfulfilling”. “With the potential payoff of AI leadership seemingly so high, the companies continue to make those bets, forcing investors and customers alike to assess how their interests are impacted,” Forrester Research Inc. analyst Lee Sustar said in a note, as quoted by Bloomberg.

(With inputs from agencies)
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