Alphabet, Microsoft, Amazon battle cloud

Alphabet, Microsoft and Amazon are heading into another cloud earnings showdown on April 29, when Alphabet and Amazon are scheduled to report and Microsoft is set to release fiscal third-quarter results. (abc.xyz) (microsoft.com) (ir.aboutamazon.com) The fight is over enterprise computing rented by the hour: companies buy cloud capacity from Amazon Web Services, Microsoft Azure or Google Cloud instead of building their own data centers. Generative artificial intelligence has made that market more valuable because large models need huge clusters of chips, storage and networking. (cnbc.com) Microsoft set the pace in the latest reported quarter. In the three months ended December 31, 2025, Azure and other cloud services revenue grew 39%, helping Intelligent Cloud revenue rise 29% to a gain of $7.4 billion. (microsoft.com 1) (microsoft.com 2) Amazon’s latest reported numbers showed Amazon Web Services sales up 24% year over year to $35.6 billion in the fourth quarter of 2025. Amazon also told investors it expects about $200 billion of capital spending in 2026, mostly for data centers. (ir.aboutamazon.com) (cnbc.com) Alphabet’s latest annual results showed Google Cloud growing fast enough to keep investors focused on its next print, but the bigger jolt was spending. Alphabet said 2026 capital expenditures would be $175 billion to $185 billion, after telling investors much of that budget still goes to servers. (cnbc.com) (abc.xyz) Those budgets are the cost of chasing enterprise AI workloads, the software jobs that run chatbots, coding tools, search assistants and internal business agents. The cloud company that wins those workloads often also sells databases, security tools, developer software and long-term contracts around them. (cnbc.com) Investors are no longer rewarding spending by itself. CNBC reported in February that the four biggest U.S. internet companies were on track for nearly $700 billion in combined 2026 AI build-out spending, while free cash flow was expected to come under heavier pressure. (cnbc.com) That pressure is already showing up in margins. Microsoft said gross margin percentage in its cloud business fell because of continued investment in AI infrastructure, and Amazon’s spending plan drew an immediate stock selloff after its February report. (microsoft.com) (cnbc.com) Amazon has argued the demand is real, not speculative. Andy Jassy wrote on April 9 that Amazon was not committing about $200 billion in 2026 capex “on a hunch” and said the company had customer commitments for a substantial portion of that spend. (cnbc.com) (aboutamazon.com) Alphabet and Microsoft are making similar claims in different language: build capacity now, then fill it with AI demand later. April 29 will show whether Azure keeps widening the lead, whether AWS reaccelerates, and whether Google Cloud can turn Alphabet’s spending surge into share gains. (microsoft.com) (abc.xyz) (ir.aboutamazon.com)