Four of the world's largest technology companies—Alphabet Inc., Amazon.com Inc., Meta Platforms Inc., and Microsoft Corporation—all reported quarterly earnings on Wednesday that surpassed analyst expectations, fueled by rapid expansion in artificial intelligence and cloud computing. Among them, Alphabet stood out with an 81% profit surge, sending its shares up 7% in after-hours trading and pushing its market value toward $4.5 trillion (€4.14 trillion).
The results underscore how deeply AI and digital services are reshaping the global economy, now accounting for roughly 15% of global GDP, or about $16 trillion (€14.7 trillion), according to the World Bank. Yet the earnings also highlight rising costs and investor unease about the sustainability of massive spending on AI infrastructure, especially as broader economic concerns—including energy price spikes linked to the Iran conflict—loom over Europe and beyond.
Alphabet's Cloud and AI Bets Pay Off
Alphabet earned $62.6 billion (€57.6 billion), or $5.11 per share, in the January–March period, an 81% increase from a year earlier. Revenue climbed 22% to $109.9 billion (€101.1 billion). Google's core digital advertising business, driven by its dominant search engine, grew 16% year-on-year—the fourth consecutive quarter of ad revenue growth above 10%.
The standout performer was Google Cloud, where revenue jumped 63% to $20 billion (€18.4 billion), boosted by demand for AI services and deals with corporate clients and government agencies, including the U.S. military. That growth has not been without controversy: Google employees have protested the Pentagon AI deal, citing concerns over inhumane military applications. Nonetheless, Alphabet's market value has more than doubled over the past year, from $1.9 trillion (€1.75 trillion) to approximately $4.2 trillion (€3.86 trillion).
Investors remain wary, however, that Alphabet and its peers may be overspending on an emerging technology. The company's capital expenditures have risen sharply, though executives argue the investments are essential to maintain leadership in AI.
Meta Beats Forecasts but Raises Spending Plans
Meta Platforms reported first-quarter earnings that beat expectations, with net income of $26.8 billion (€24.6 billion), up 61% from a year earlier, and revenue of $56.31 billion (€51.8 billion), a 33% increase. CEO Mark Zuckerberg described the quarter as a milestone, citing the release of the first model from Meta Superintelligence Labs. “We're on track to deliver personal superintelligence to billions of people,” he said.
However, Meta raised its capital spending forecast for the year to between $125 billion and $145 billion (€115 billion to €133 billion), up from a previous range of $115 billion to $135 billion. The company also plans to cut about 10% of its workforce—around 8,000 jobs—while increasing investment in AI infrastructure and talent. Shares fell about 7% in extended trading as investors questioned the strategy.
Meta reported that 3.56 billion people used at least one of its apps daily in March, a slight decline from December, partly due to internet disruptions in Iran and restrictions in Russia.
Microsoft and Amazon: Steady Growth, Heavy Spending
Microsoft posted net income of $31.8 billion (€29.2 billion), up 23%, on revenue of $82.9 billion (€76.3 billion), driven by its cloud and AI services. Growth in Microsoft Cloud and Azure offset weakness in hardware and gaming. The company told investors that capital expenditures for the year will reach $190 billion (€163 billion), a more than 60% increase from last year.
Amazon reported strong first-quarter results, with cloud unit sales rising 28%—the fastest growth in 15 quarters. The Seattle-based company gave a strong outlook for the current quarter, though shares initially dipped nearly 2% before recovering. Amazon's planned $200 billion (€184 billion) investment in AI, robotics, semiconductors, and satellites is up 60% from last year's $128 billion (€118 billion). CEO Andy Jassy defended the spending, saying it targets long-term returns.
The earnings reports come amid a broader tech rally that has seen companies like Intel shares surge 20% on AI-driven earnings and Nvidia's earnings spotlight the Blackwell chip, underscoring Europe's reliance on American AI hardware. For European investors and policymakers, the results reinforce the urgency of building domestic AI capabilities and managing the economic ripple effects of Big Tech's spending spree.
