Global Big Tech companies posted strong first-quarter results that underscored the potential to make money from artificial intelligence, but concerns about an AI bubble have not eased. With massive capital spending far outpacing revenue growth, stock-market reactions were mixed, and financial worries surrounding OpenAI — a symbolic name in the AI industry — have intensified.
According to the IT industry on May 3, four major Big Tech companies — Alphabet, Meta, Microsoft and Amazon — released their first-quarter results after the market close late last month.
The numbers beat expectations. Alphabet reported revenue of $109.9 billion, up 22% from a year earlier and above the market estimate of $107.2 billion. Google Cloud revenue rose 63% to $20.0 billion. Microsoft posted revenue of $82.9 billion, up 18%, with Azure growth reaching 40%. Meta’s revenue climbed 33% to $56.3 billion. Amazon reported revenue of $181.5 billion, up 17%, while AWS revenue grew 28% to $37.6 billion, its fastest growth rate in 15 quarters.
Even with the earnings surprise, some stocks fell after companies raised capital spending plans alongside their results.
Meta lifted its annual capital expenditure guidance to $125 billion to $145 billion, sending its shares down more than 8% in after-hours trading. Microsoft’s shares slipped about 4% after it reported first-quarter capital spending of $34.9 billion, a 74% jump from a year earlier. Alphabet raised its annual capital spending guidance to $180 billion to $190 billion, and Amazon pledged AI infrastructure investment totaling $200 billion. Estimated AI capital spending this year by the five largest hyperscalers combined is expected to exceed $650 billion.
The sharpest focus is on privately held OpenAI. Analysts have said it is losing share to Anthropic in the coding market and to Google’s Gemini in the broader consumer market. Reports of missing revenue targets and internal conflict have added to unease. In particular, OpenAI’s unusually high share of capital spending compared with rivals has emerged as a key variable as it approaches a public listing.
* This article has been translated by AI.
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