Big Tech AI Capex Tops $650 Billion as Q1 Earnings Beats Pressure Bitcoin Risk Trade
Amazon, Meta, Microsoft, and Alphabet all topped Wall Street income forecasts on Wednesday. However, aggressive capital spending plans triggered after-hours selloffs and pressured tech-correlated threat belongings.
Meta dropped 6% after elevating its 2026 capital spending information, whereas Microsoft and Amazon slipped on AI buildout prices. Alphabet was the lone gainer, lifted by cloud energy.
Big Tech Q1 Earnings Show Cloud Driving the Growth
Amazon reported first-quarter internet gross sales of $181.5 billion, up 17% 12 months over 12 months. Earnings per share got here in at $2.78 towards a $1.62 estimate. The retailer guided second-quarter gross sales to between $194 billion and $199 billion, properly above consensus.
Microsoft’s fiscal third-quarter income reached $82.89 billion, up 18% 12 months over 12 months, whereas working revenue climbed to $38.4 billion. Microsoft’s AI enterprise now runs at a $37 billion annualized income charge, up 123% 12 months over 12 months.
Meta posted $56.3 billion in income and earnings of $10.44 per share. The determine was boosted by an $8 billion one-time tax profit.
Alphabet delivered $109.9 billion in income. Google Cloud gross sales of $20 billion topped Wall Street estimates by practically $2 billion.
AI Capex Push Past $650 Billion Spooks Investors
The headline determine is the spending. Meta raised full-year 2026 capital spending steerage to between $125 billion and $145 billion. The firm cited larger part prices and added information middle capability for AI workloads.
Combined 2026 capex throughout the 4 hyperscalers is on monitor to exceed $650 billion, in response to business estimates. Investors are more and more fearful that depreciation and working prices will outpace near-term AI income contributions.
That rigidity explains the after-hours strikes. Meta’s 6% slide and Microsoft’s 2.5% drop replicate a market extra targeted on payback timelines than on top-line beats.
Crypto Markets Watch the Risk-Asset Spillover
Bitcoin (BTC) has tracked the Magnificent 7 intently all through 2026. Wednesday’s prints will assist form near-term sentiment throughout digital belongings.
Cloud and AI energy might ultimately assist tokens tied to compute and decentralized infrastructure narratives.
However, persistent capex nervousness may drag tech-correlated threat belongings, together with Bitcoin and Ethereum (ETH), into May. Apple’s report and the PCE index are subsequent on the calendar.
The coming periods will present whether or not traders deal with this $650 billion spend as self-discipline or as overreach.
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