Alphabet Q1 beats with $109.9B revenue and $5.11 EPS; Meta raises AI spending
- Alphabet and Meta both beat first-quarter estimates on April 29, but the market split them apart over one thing — how believable their AI spending is. - Alphabet posted $109.9 billion in revenue and $5.11 EPS, while Meta reported $56.3 billion and lifted 2026 capex to $125 billion-$145 billion. - Investors rewarded Google’s AI payoff story, but Meta’s bigger bill revived old fears that spending may outrun returns.
Big Tech earnings turned into an AI trust test on April 29. Alphabet and Meta both put up strong first-quarter numbers. Both said AI is driving demand. But the market treated them very differently — because this quarter was less about who spent more and more about who proved the spending is already paying off. (abc.xyz) ### What did Alphabet actually show? Alphabet’s quarter was huge even by Alphabet standards. Revenue came in at $109.9 billion, up 22%, and diluted EPS hit $5.11. The important part wasn’t just the beat. It was where the growth showed up: Google Search kept growing, Google Cloud accelerated hard, and (abc.xyz)ry blunt way of saying the AI buildout is not slowing down. (abc.xyz) ### Why did investors like Google’s version of the story? Because Alphabet gave them proof points, not just promises. Google Cloud topped $20 billion in quarterly revenue and grew 63% year over year. Earlier in 2026, management had already said roughly 60% of capex was going to machines like servers, (abc.xyz)the revenue line moving alongside the infrastructure bill. (cnbc.com) ### What did Meta report? Meta’s operating business also looked strong. Revenue rose 33% to $56.31 billion, operating margin held at 41%, and diluted EPS came in at $10.44. But that EPS figure got a big lift from an $8.03 billion tax benefit tied to Treasury guidance on prior R&D costs. Meta itself said EPS would have been $3.13 lower without that benef(cnbc.com)d than it looked at first glance. (investor.atmeta.com) ### So why did Meta get punished? Because Meta raised its 2026 capital expenditure forecast to $125 billion to $145 billion, up from its prior $120 billion to $135 billion range, mainly because of higher component pricing and data-center costs. Investors have lived through this movie before(investor.atmeta.com) is wrong. It means the burden of proof is higher. (investor.atmeta.com) ### Why is this really an AI trust gap? Both companies are spending enormous sums on compute, chips, and data centers. But Google’s AI pitch now looks tied to existing businesses people already understand — Search, Cloud, YouTube, subscriptions. Meta’s pitch is broader and more ambitious, w(investor.atmeta.com)ve before it sounds monetizable. (investor.atmeta.com) ### How jumpy was the market going in? Very. Before the reports, options traders were pricing more than $800 billion of combined market-cap movement around earnings from Alphabet, Meta, Amazon, and Microsoft. So this was never going to be a calm reaction. The setup was already primed for investors to separate “AI upside” from “AI spending anxiety” in a hurry. (cnbc.com) ### What matters next? For Alphabet, the next question is whether Cloud and Gemini can keep converting AI demand into obvious revenue fast enough to justify a $190 billion capex year. For Meta, the next question is whether advertisers and new AI products can make the spending feel less like a leap of faith. Both companie(cnbc.com)e. (cnbc.com) ### Bottom line This quarter wasn’t really about whether Alphabet and Meta had good businesses — they did. It was about whether investors think AI spending is becoming a machine for profits or still a machine for promises. On April 29, Alphabet looked like the profit version. Meta still looked like the promise version. (abc.xyz)m6bf/default.aspx))
