Whalesbook
Investor reactions sharply diverged, highlighting different views on risk and reward in the AI boom.
Meta Platforms, under CEO Mark Zuckerberg, reported Q1 revenue of $56.31 billion, a 33% jump year-over-year. However, attention quickly turned to its increased full-year 2026 capital expenditure guidance, now set between $125 billion and $145 billion, a $10 billion rise at the midpoint. CFO Susan Li explained the increase was driven by underestimated computing power needs. CEO Mark Zuckerberg admitted the company lacks a fixed plan for monetizing AI products, even as he expressed confidence in the Superintelligence Lab. This uncertainty led to Meta shares falling, with some reports showing declines of up to 7% in after-hours trading.
Alphabet's Cloud Momentum
Alphabet, Google's parent, saw the strongest market reception, with shares jumping nearly 7% in extended trading. The tech giant reported Q1 revenue of $109.9 billion, up 22% year-over-year, driven by strong cloud growth. Alphabet also raised its full-year 2026 capex guidance to between $180 billion and $190 billion, partly to accommodate the recent Intersect acquisition. CEO Sundar Pichai described the current era as a major platform shift driven by AI agents, positioning Alphabet to build leading AI infrastructure.
Microsoft's Cash Flow Conundrum
Microsoft's stock dipped nearly 2% immediately after its results were announced, before recovering slightly. The company announced Q1 sales of $83 billion, a 16% increase, and profits up 23% to $38 billion. Despite beating revenue expectations, free cash flow fell nearly $6 billion year-over-year to $15.8 billion, a concern for investors focused on immediate returns. CFO Amy Hood reassured investors that AI investments were proceeding smoothly with better margins than the early cloud transition. CEO Satya Nadella highlighted AI's $37 billion annual run rate potential. However, questions remain about the massive costs of its AI push, including substantial investments in OpenAI.
Amazon's AI Engine
Amazon shares climbed about 4% in after-hours trading. The company reported a 15% profit increase and 28% growth in its crucial cloud computing business, AWS, marking its strongest performance in over four years. CEO Andy Jassy noted rapid progress in Amazon's AI chip business, which has reached a $20 billion annual run rate, and projected total AI investments of around $200 billion this year. Partnerships with AI firms, including Anthropic and OpenAI, are driving growth across its core operations.