Big Tech's AI bill

Haverhill Financial Research · News · October 11, 2026

When Alphabet, Meta and Amazon reported second-quarter results this summer, all three raised what they plan to spend in 2026 on data centers, servers and chips. Put together, their guidance comes to roughly $545 billion to $570 billion for the year. Microsoft spent $41 billion in its June quarter alone.

That money is revenue for the companies that build the equipment, which is why these guidance numbers move chip stocks as much as the spenders themselves. Third-quarter results arrive in late October, and the first question for each company will be whether the number goes up again.

Alphabet spent $44.9 billion in the second quarter and lifted its full-year range by $15 billion at both ends. Google Cloud revenue grew 82% to $24.8 billion, and the cloud backlog, meaning contracted revenue not yet recognized, reached $514 billion. That backlog is the strongest evidence any of the four has offered that the spending has customers waiting for it.

Amazon raised its plan to about $220 billion from about $200 billion. AWS grew 37% to $42.2 billion, with a backlog of $496 billion. Amazon said it expects demand for computing capacity to run ahead of what it can supply through 2026 and into 2027, which is the reason it gave for spending more.

Meta is the odd one out: it does not rent its computing to anyone else, so the return has to come through advertising. Revenue grew 28% to $60.8 billion in the quarter, and it spent $31.1 billion on capital projects. It also guided total expenses of $165 billion to $169 billion for the year, a reminder that the data centers bring depreciation and power bills with them.

Microsoft spent $41 billion in the June quarter. Azure grew 43%, and Microsoft guided to about 45% growth for the September quarter, an acceleration at a business that already brings in tens of billions of dollars a year.

Most of this money is spent on chips, networking gear, memory, power equipment and the buildings to house them. Nvidia and Broadcom, which we cover in our Broadcom report, sell the processors and custom chips; others supply the memory, cooling and electrical gear. When a hyperscaler raises its budget, those suppliers' order books tend to follow a quarter or two later.

Alphabet, Microsoft, Meta and Amazon all report in late October. We will be looking for three things: any first word on 2027 spending, whether cloud growth keeps pace with the spending, and how much depreciation each company now expects, since that is where today's spending shows up in tomorrow's profits.

The spending is not slowing, and the three companies that sell cloud capacity are showing demand to match it. The risk is timing rather than direction: if revenue growth at the cloud businesses slows while budgets keep rising, profit margins will absorb the difference. Until then, the guidance numbers are the single most important input for every AI hardware supplier.

Alphabet second-quarter 2026 earnings release and call; Amazon.com second-quarter 2026 earnings release and call; Meta Platforms second-quarter 2026 earnings release; Microsoft fiscal 2026 fourth-quarter earnings release and call.

Disclosures. Haverhill Financial Research is a publisher of general financial commentary. This article is not personalized investment advice and does not consider any reader's financial situation; readers should do their own research. Nothing here is a recommendation to buy or sell any security. Company figures and guidance can change. The author of this post does not hold positions in the companies named. Data as of October 11, 2026.