30 April 2026
If you are covering the latest results from Google, Meta and Microsoft, please find below a comment from Ben Barringer, head of technology research at Quilter Cheviot:
“What is clear from the reporting from the hyperscalers is that the big winners in the whole AI boom are the chip companies – Nvidia, Broadcom and AMD, as well as memory companies. Each of Google, Microsoft, Amazon and Meta have shown that capex will continue to rise, and as such demand for semiconductors will only continue to grow.
“Google was undoubtedly the highlight of the earnings report, with revenues up 19% on the back of really strong demand for Search. AI Mode is proving to be working very well, while the Cloud backlog has almost doubled in the space of a quarter. Its capex is up only marginally this year, but we are expecting significant growth on this from in 2027. Having initially been a little slower out of the blocks, Google has done a really good job of transforming itself into a real AI powerhouse with its innovations to Search leading the way. YouTube did slightly miss on its expectations and continues to drag a little, but overall Google is hitting all the right notes.
“Meta, meanwhile, was probably the biggest disappointment last night. It beat expectations, but gave guidance in line with expectations, while also raised its capex significantly. The worrying part is that Meta was rather vague on the elements of return on investment, exactly what investors are fearing with all this spending going on. The number of active users also missed expectations, interestingly due to the conflict in the Middle East, although Meta does continue to outperform the wider advertising market. There remains a big overhang for Meta as a result of recent court cases around social media use and its appropriateness for young people, and as such the stock is likely to be weighed down as a result.
“Finally, Microsoft provided little fuss, with an in line set of results and demand remaining strong for its cloud business Azure. The big positive from Microsoft is that it is beginning to monetise Copilot more effectively as businesses start to properly integrate it into their workflows and employees get more familiar with the tool. It is also noteworthy that Microsoft is moving to a consumption charging model, rather than a seat based one, addressing concerns around software companies that they would not be able to effectively monetise these new tools as demand rose. Microsoft too upped its capex significantly, but a lot of this was due to the high memory prices, so there is an element of these companies not necessarily delivering a huge amount more despite the big spending numbers continuing to increase.
“All in all, it is clear that demand for AI shows no sign of slowing down, and as such capex will remain high amongst the hyperscalers. While banana skins were avoided on a crowded reporting day, little can be done to assuage fears that the AI boom will come to an end one day. For now, the tech giants plough on, delivering on that exceptional demand that shows no sign of going away.”
