NeuralStackAlphabet, Meta Platforms, and Microsoft all told investors they are preparing to spend even more on artificial intelligence, but the market’s reaction was sharply divided. Meta’s stock fell more than 6% after hours, Microsoft ended up roughly flat, and Alphabet rose almost 7% after hours.
The difference came down to whether investors believed the money was translating into real business momentum. At Alphabet, Chief Financial Officer Anat Ashkenazi said the company is seeing “unprecedented internal and external demand for AI compute resources,” and pointed to record revenue and backlog growth in Google Cloud as evidence that the investments are working.
Alphabet also raised its full-year 2026 capital expenditure guidance to $180 billion to $190 billion, up from $175 billion to $185 billion. Ashkenazi said Google Cloud revenue grew 63% year-over-year to $20 billion, while the cloud backlog reached $462 billion and nearly doubled from the prior quarter.
She added that the company expects just north of 50% of that backlog to become revenue over the next 24 months. Sundar Pichai said paid monthly active users of Gemini Enterprise grew 40% over the last quarter, and he cited major customer deals and a nearly 800% year-over-year increase in revenue from products built on Google’s GenAI models in the first quarter.
Meta also increased its expected 2026 capex range, lifting it to $125 billion to $145 billion from a prior $115 billion to $135 billion. When asked what signs would show that AI spending is on track to produce returns, Mark Zuckerberg said the company is watching whether it remains on track to build leading models and leading products, while emphasizing Meta’s long-term focus on reaching billions of users before monetizing at scale.
Microsoft, meanwhile, joined the same wave of spending announcements, but without the same kind of market reward. Investors have been watching capital expenditures across big tech closely, with recent estimates showing combined AI-related capex could exceed $600 billion in 2026 alone, and analysts pressing CEOs for clearer evidence of return on investment.
Alphabet’s response stood out because it offered something concrete: growth in cloud revenue, a large backlog, and signs of strong enterprise demand for AI services. Melissa Otto, head of Visible Alpha Research at S&P Global, said Alphabet’s cloud results were a “meaningful beat” that suggests the company may be taking share in a competitive market.
Why this matters
The reaction to these earnings shows that investors are no longer rewarding AI spending on its own. They want proof that spending on chips, data centers, and compute can turn into durable revenue, especially as the cost of that buildout keeps rising.
That leaves Alphabet in a stronger position for now, because it can point to cloud growth and expanding demand for Gemini-related services rather than only to bigger budgets. Meta and Microsoft still have room to make the same case, but after hours, the market made clear that AI ambition alone is not enough.
Going forward, the key question will be whether these companies can keep scaling AI infrastructure without eroding investor confidence. For now, Alphabet is the one that persuaded the market that the spending is already paying off.