This article first appeared on GuruFocus.
Meta Platforms (NASDAQ:META) fell 7.42% in premarket trading after the company reported Q1 revenue of $56.3 billion, up 33% year over year and above the $55.6 billion Wall Street expected, but raised its 2026 capital expenditure forecast to between $125 billion and $145 billion, citing higher memory costs. Net income rose 61% to $26.8 billion, though that included an $8 billion one-time tax benefit. CEO Mark Zuckerberg said the spending was necessary to build the infrastructure behind what he described as a coming ecosystem of personal and business AI agents.
The other three told a broadly similar story. Alphabet (NASDAQ:GOOG) gained 6.32% in premarket after Google’s cloud revenue surged 63% to $20 billion and search advertising grew 19% to $60.4 billion, with total revenue reaching $110 billion. Microsoft (NASDAQ:MSFT) slipped 1.02% despite reporting record quarterly revenue of $82.9 billion, up 18%, with Azure cloud growth of 40% year over year. Amazon (NASDAQ:AMZN) added 1.79% after AWS grew 28% to $37.6 billion and operating income rose 30% to $24 billion.
The numbers that matter most right now aren’t revenue or net income. All four companies are running a longer race, and the scoreboard is capex. Meta committed to between $125 billion and $145 billion for the year, Microsoft and Alphabet each raised to as much as $190 billion, with Alphabet signaling a further increase in 2027, and Amazon spent $43.2 billion in Q1 alone. Combined, the four are tracking toward more than $685 billion in 2026 capital expenditure.
That number is getting harder to ignore as investors weigh the return on spending of this scale against a backdrop of rising memory costs, higher energy prices, and supply chains still absorbing the strain of Middle East instability.
