Tech giants double down on AI as earnings reveal growth gains and rising costs

Four of the Magnificent Seven (Mag 7) tech giants are still on track to meet their massive artificial intelligence (AI) spending targets this year, according to their earnings report.

The companies that have reported quarterly earnings post-market on Wednesday are Microsoft (MSFT), Alphabet (GOOG), Meta (META) and Amazon (AMZ), with a combined market cap of approximately $12 trillion.

Previously, an analysis by Bridgewater Associates flagged that the four companies are expected to spend roughly $650 billion together on AI infrastructure in 2026. While most of them didn’t break out their AI spending in their latest earnings, they seem on track to continue their spending spree in the sector.

The investment has significant implications for the digital asset sector, particularly for bitcoin miners, who are increasingly pivoting away from mining toward hosting computers for AI as part of their revenue diversification strategy. The bitcoin miners already have data centers ready and powered up to host a massive amount of machines that are needed for AI computing. Facing a margin squeeze from lower bitcoin prices and increased competition, miners have started lending their data centers to AI firms to diversify their revenue streams.

AI-linked bitcoin mining stocks with exposure to hyperscaler infrastructure deals include IREN (IREN), which was down about 0.3%, TeraWulf (WULF) and Cipher Digital (CIFR), which fell 0.5%. Meanwhile, following the results, Microsoft was down over about 2.4% in after-hours trading, Alphabet up 6%, Meta down 6.6% and Amazon down 3.7%. Bitcoin was down about 0.9% in the last 24 hours.

The next big test of overall market sentiment and miners will come when chipmaker Nvidia reports earnings on May 20.

Here is what the tech giants reported and said during their earnings.

Microsoft

Microsoft reported fiscal Q3 2026 revenue of $82.9 billion, beating the $81.4 billion consensus, with EPS of $4.27 against the $4.06 estimate, according to FactSet data.

“We are focused on delivering cloud and AI infrastructure and solutions that empower every business to eval-max their outcomes in the agentic computing era,” said Satya Nadella, chairman and chief executive officer of Microsoft, noting that the firm’s AI business brought in $37 billion, up 123% year-over-year.

Alphabet

Alphabet pointed to AI as a core driver of growth and reported capital expenditures of $35.67 billion for the quarter, slightly below estimates of $36.39 billion.

“Our AI investments and full stack approach are lighting up every part of the business,” Alphabet CEO Sundar Pichai said, linking gains in Search and Cloud to AI-driven demand. Google Cloud revenue rose 63% to $20 billion, fueled in part by “enterprise AI Solutions and enterprise AI Infrastructure,” showing how AI is shaping both product usage and enterprise adoption.

Alphabet reported Q1 2026 revenue of $109.9 billion, beating the $107 billion consensus, with EPS of $2.81 against the $2.63 estimate.

Amazon

Amazon reported Q1 2026 revenue of $181.5 billion, beating the $177.2 billion consensus, with EPS of $2.78 against the $1.63 estimate. AWS revenue came in at $37.6 billion against the $36.92 billion estimate.

Amazon said free cash flow fell sharply over the past year, pointing to a surge in infrastructure spending. The company noted the drop was “driven primarily by a year-over-year increase of $59.3 billion in purchases of property and equipment,” adding that “this increase primarily reflects investments in artificial intelligence.” The shift shows how heavily Amazon is leaning into AI, even as it weighs on near-term cash generation.

Meta

Meta pointed to rising AI infrastructure costs as a key driver of spending, reporting $19.84 billion in capital expenditures for the quarter and raising its full-year outlook to $125–145 billion, up from its prior guidance of $115–$135 billion. The increase reflects “higher component pricing this year and, to a lesser extent, additional data center costs to support future year capacity,” the company said, underscoring how AI buildout is driving investment.

CEO Mark Zuckerberg framed the push more directly, calling it a “milestone quarter” tied to AI progress and adding, “We’re on track to deliver personal superintelligence to billions of people.”

Meta reported Q1 2026 revenue of $56.31 billion, beating the $55.5 billion consensus, with EPS of $10.44 against the $6.67 estimate.