Google, Microsoft, Meta, and Amazon capex spending to hit $725 billion in 2026, up 77% from last year — analyst says bear thesis is 'garbage'

Google, Amazon, Microsoft, and Meta collectively plan to spend $725 billion on capex in 2026, up 77% from last year's record $410 billion, according to first-quarter earnings compiled by the Financial Times. Google delivered the strongest results, with cloud revenue jumping 63% year over year to $20 billion, while rising memory chip prices pushed spending forecasts higher at both Microsoft and Meta.

"The AI economy is healthy," Brent Thill, an analyst at Jefferies, told the Financial Times, adding that recent revenue growth justified the enormous capital outlays. "The bear thesis is garbage."

Microsoft set its calendar-year 2026 capex at $190 billion, well above the $152 billion average analyst estimate. The company’s CFO, Amy Hood, attributed $25 billion of that figure to rising memory chip and component costs. She told investors that despite the additional spending, Microsoft expects to remain capacity-constrained through at least 2026 as it works to bring GPU, CPU, and storage infrastructure online faster.

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Meta increased its full-year projection by $10 billion to a range topping $145 billion. The company cited higher component pricing, particularly for memory, alongside growing competition for land, power, and skilled workers needed to build data centers. Revenue grew 33% to $56.3 billion.

Dec Mullarkey, managing director of SLC Management, told the Financial Times that investors are growing uneasy with Meta's escalating infrastructure costs, questioning whether a historically lean business is becoming far more capital-hungry. “Investors continue to be concerned about how Zuckerberg’s once capital-light money machine may be morphing into a capital-intensive incinerator,” he said.

Alphabet posted an 81% increase in net income to $62.6 billion on revenue of $110 billion. Google Cloud reached $20 billion in quarterly revenue, growing faster than Amazon Web Services ($37.6 billion total, adding $8.3 billion year over year) and Microsoft's Azure-driven cloud segment ($34.7 billion total, adding $7.9 billion).

The company's cloud contract backlog reached $460 billion, roughly double the $240 billion reported at the end of Q4 2025. Google Cloud boss Thomas Kurian credited the company's strategy of building custom AI chips, foundation models, and products in-house for giving it a cost and research advantage over competitors. Alphabet's capex guidance rose by $5 billion to as much as $190 billion, matching Microsoft. Shares climbed 7% after hours, putting Alphabet on track for a record $4.3 trillion market valuation.

CEO Mark Zuckerberg offered no firm schedule for releasing improved AI models to follow the recently launched Muse Spark. Asked about the pace of Meta's AI agent development, Zuckerberg told investors: "There's a lot of agents out there that people are building for different things, but there aren't that many that I would want to give to my mother."

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