Microsoft — Q3 FY2026 (January–March 2026)

Microsoft reported $82.9 billion in revenue, up 18% year-over-year, with Azure growing 40% — ahead of guidance — because the company delivered capacity earlier in the quarter than planned.² The AI business crossed $37 billion in annual revenue run rate, growing 123% year-over-year.¹ Satya Nadella framed the infrastructure program around simultaneous optimization across every layer of the technology stack, from data center design to custom silicon to model architecture, and reported operational milestones that translated the capital story into engineering outcomes.

“We added another gigawatt of capacity this quarter and remain on track to double our overall footprint in just 2 years. We have reduced dock times for new GPUs in our biggest regions by nearly 20% since the beginning of the year.”
— Satya Nadella, Chairman and CEO, Microsoft, Q3 FY2026 Earnings Call¹

Nadella also cited a 40% improvement in inference throughput across Copilot-powered workloads through software and hardware optimization. The Maia 200 AI accelerator, now live in Iowa and Arizona data centers, delivers over 30% improved tokens per dollar compared to the latest third-party silicon in the fleet.¹ The Cobalt server CPU is deployed in nearly half of Azure's data center regions running workloads for customers including Databricks, Siemens, and Snowflake.¹ CFO Amy Hood disclosed that $31.9 billion in CapEx was spent in the quarter, with the sequential decline from Q2 attributed to normal variability in structure buildouts and finance lease delivery timing rather than any deceleration in the underlying program.²

“This quarter, roughly two-thirds of our CapEx was for short-lived assets, primarily GPUs and CPUs. The remaining spend was for long-lived assets that will support monetization over the next 15 years and beyond.”
— Amy Hood, CFO, Microsoft, Q3 FY2026 Earnings Call²

Hood guided Q4 FY2026 CapEx to "over $40 billion," which would represent the largest single-quarter infrastructure spend in the company's history. Azure is guided to grow 39%–40% constant currency in Q4 against a strong prior-year comparable that itself included accelerating growth. The RPO balance reached $627 billion, up 99% year-over-year, with roughly 25% expected to convert to revenue in the next 12 months — up 39% year-over-year.²

“Broad and growing customer demand continues to exceed supply, and we continue to balance the incoming supply we can allocate here against our other high ROI priorities, first-party applications, R&D and end-of-life server replacement.”
— Amy Hood, CFO, Microsoft, Q3 FY2026 Earnings Call²

Alphabet — Q1 FY2026 (January–March 2026)

Alphabet reported $109.9 billion in revenue, up 22% year-over-year, its 11th consecutive quarter of double-digit growth.¹² Google Cloud accelerated to $20 billion in revenue, up 63%, with operating margin expanding from 17.8% a year ago to 32.9%.⁴ Revenue from products built on GenAI models grew nearly 800% year-over-year within Cloud in Q1.³ The quarter's most striking infrastructure data point was the Cloud backlog: $462 billion at quarter-end, which Anat Ashkenazi described as having nearly doubled sequentially, partly driven by large enterprise AI contract signings and partly by the first inclusion of TPU hardware sales in the backlog definition.⁴

“CapEx was $35.7 billion in the first quarter with the overwhelming majority of the spend in technical infrastructure to support the AI opportunities we see across the company. Approximately 60% of our investment in technical infrastructure this quarter was in servers, and 40% was in data centers and networking equipment.”
— Anat Ashkenazi, CFO, Alphabet, Q1 FY2026 Earnings Call⁴

Google raised its full-year 2026 CapEx guidance to $180–$190 billion from a prior range of $175–$185 billion, with the increase attributed primarily to the Intersect acquisition closing in March.⁴ More consequential for the multi-year outlook, Ashkenazi stated directly that 2027 CapEx would significantly increase versus 2026 — making Alphabet the only company in this cohort to explicitly guide toward further escalation beyond the current year. Google also introduced its eighth-generation TPUs — TPU 8t for training (3x the processing power of Ironwood) and TPU 8i for inference (80% better performance per dollar versus the prior generation) — and announced plans to sell TPU hardware directly to enterprise customers for on-premises deployment.³

“We are seeing unprecedented internal and external demand for AI compute resources. The investments we are making in AI is delivering strong growth as evidenced by the record revenue and backlog growth in Google Cloud and strong performance in Google services. And as a result, we expect our 2027 CapEx to significantly increase compared to 2026.”
— Anat Ashkenazi, CFO, Alphabet, Q1 FY2026 Earnings Call⁴

Sundar Pichai noted that since upgrading AI Overviews and AI Mode to Gemini 3, Google reduced the cost of core AI responses by more than 30% through hardware and engineering breakthroughs.³ Search latency has declined more than 35% over the past five years even as AI features were added. These efficiency gains are running in parallel with the capacity expansion, with savings being reinvested into additional capacity rather than flowing to margin. Free cash flow in Q1 compressed to $10.1 billion, down from $18.9 billion in Q1 2025, even as operating income grew 30% to $39.7 billion — a direct consequence of CapEx growth outpacing operating cash flow generation.^11,12

Meta Platforms — Q1 FY2026 (January–March 2026)

Meta reported $56.3 billion in total revenue, up 33% year-over-year, with advertising revenue growing 33% to $55 billion and 41% operating margin on Family of Apps.¹² The quarter's infrastructure headline was a CapEx guidance revision: full-year 2026 raised to $125–$145 billion from a prior range of $115–$135 billion, and separately, a $107 billion step-up in contractual commitments during the quarter, covering multiyear cloud deals and infrastructure purchase agreements.⁶

“We are increasing our infrastructure CapEx forecast for this year. Most of that is due to higher component costs, particularly memory pricing, but every sign that we're seeing in our own work and across the industry gives us confidence in this investment.”
— Mark Zuckerberg, CEO, Meta Platforms, Q1 FY2026 Earnings Call⁵

Zuckerberg detailed a three-part infrastructure strategy: deploying more than one gigawatt of custom silicon developed with Broadcom, supplemented by significant AMD capacity and new NVIDIA systems rolled out in parallel.⁵ Meta cited compute availability as the primary determinant of model quality — a framing that links the infrastructure program directly to the Meta Superintelligence Labs roadmap and the MuSpark model, which has already driven double-digit increases in Meta AI sessions per user since launch.

“Compute is becoming increasingly important as it determines the quality of services we can provide including powering more capable models and delivering innovative new products. It is also becoming more critical to how we work as we are entering a world where employees are managing agents to help them generate new ideas, run experiments, execute tasks and build products.”
— Susan Li, CFO, Meta Platforms, Q1 FY2026 Earnings Call⁶

Susan Li noted the guidance raise reflected both higher component pricing and, to a lesser extent, additional data center costs for future-year capacity.⁶ Notably, Q1 2026 CapEx of $19.8 billion (including finance leases) came in slightly below Q4 2025's $21.4 billion on a cash basis, indicating the higher full-year guidance reflects cost inflation for already-planned capacity and a back-half acceleration rather than an immediate Q1 step-up.¹¹ Meta simultaneously announced plans to reduce employee headcount in May 2026 to offset higher infrastructure spend. For 2027, management declined to provide any CapEx figure, with Li describing it as too early.

Amazon — Q1 FY2026 (January–March 2026)

Amazon reported $181.5 billion in revenue, up 17%, with AWS growing 28% to $37.6 billion — the fastest growth rate in 15 quarters for the segment, at the largest absolute quarterly revenue in its history ($150 billion annualized run rate).⁷ Amazon deployed $44.2 billion in CapEx during Q1, the single largest infrastructure quarter in this analysis and up 77% versus Q1 2025.¹¹ Andy Jassy opened by stating: "We've never seen a technology grow as rapidly as AI."⁷

“Of the AWS CapEx we intend to spend in 2026, much of which will be installed in future years, we have high confidence this will be monetized well as we already have customer commitments for a substantial portion of it and that it will yield compelling operating margins and ROIC.”
— Andy Jassy, President and CEO, Amazon, Q1 FY2026 Earnings Call⁷

Jassy provided the most structured public explanation of the CapEx monetization cycle of any executive in this group. Land, power, buildings, chips, servers, and networking gear are purchased 6 to 24 months before the first customer billing, depending on the asset type.⁷ Data centers carry 30-plus-year useful lives; chips, servers, and networking gear have 5-to-6-year lives. Amazon reported negative $18.2 billion in Q1 2026 free cash flow as a direct consequence of CapEx growth outpacing revenue growth in this early phase.¹¹

“We've been through this cycle with the first big AWS growth wave and like the results. We expect to feel similarly about this next wave with much larger potential downstream revenue and free cash flow.”
— Andy Jassy, President and CEO, Amazon, Q1 FY2026 Earnings Call⁷

Amazon's custom silicon program emerged as a central strategic claim across the call. Trainium2 is nearly fully subscribed; Trainium3, which began shipping in early 2026 with 30%–40% better price-performance than Trainium2, is also nearly fully subscribed; Trainium4, approximately 18 months from broad availability, is already largely reserved.⁷ Jassy stated that Anthropic and OpenAI have made multi-gigawatt, multiyear Trainium commitments, with over $225 billion in revenue commitments across the chips business. If the custom silicon operation were a standalone business, Jassy estimated a $50 billion annual revenue run rate — framing it as one of the top three data center chip businesses in the world. At scale, he said Trainium would save Amazon "tens of billions of dollars of CapEx each year and provide several hundred basis points of operating margin advantage versus relying on others' chips for inference."⁷

Apple — Q2 FY2026 (January–March 2026)

Apple reported $111.2 billion in revenue, up 17%, a March quarter record driven by a 22% iPhone revenue increase and all-time record Services revenue of $31 billion, growing 16%.⁹ Capital expenditure for the quarter was $2.0 billion — less than 5% of Amazon's spend — reflecting Apple's on-device AI architecture, where inference runs on A19 and M-series chips in user hardware rather than in owned cloud data centers.¹¹

“This is not AI as a standalone feature, but AI as an essential intuitive part of the experience across our devices. It builds on years of innovation from the neural engine to advanced on-device processing, enabling capabilities that are not only incredibly powerful, but also respectful of user privacy.”
— Tim Cook, CEO, Apple, Q2 FY2026 Earnings Call⁹

Apple did surface AI infrastructure constraints — just not in its own data centers. Supply shortfalls on advanced-node SoCs constrained both iPhone and Mac during the quarter. Cook disclosed that the Mac Mini and Mac Studio face supply-demand imbalances extending into Q3 FY2026, with customer demand for these machines as AI and agentic development platforms arriving faster than Apple had predicted.⁹ The underlying constraint is TSMC advanced-node capacity — the same competition every hyperscaler navigates from the demand side.

“The Mac Mini and the Mac Studio, both of these are amazing platforms for AI and Agentic tools. And the customer recognition of that is happening faster than what we had predicted. We think the Mini and the Mac Studio may take several months to reach supply-demand balance.”
— Tim Cook, CEO, Apple, Q2 FY2026 Earnings Call⁹

CFO Kevan Parekh announced that Apple is discontinuing net cash neutral as a formal capital structure target, moving to independent evaluation of cash and debt.¹⁰ The Board authorized an additional $100 billion share repurchase program and a 4% dividend increase. The call's headline was the CEO transition: Tim Cook moves to Executive Chairman on September 1, 2026, with John Ternus, Apple's hardware engineering chief, succeeding him as CEO.

Hyperscaler AI CapEx: $620B and Still Climbing

The Power Delivery Gap