Written by: Matt Britzman | Hargreaves Lansdow

  • Alphabet pops on first $100bn quarter
  • Meta sinks as Zuckerberg goes all in on AI
  • Microsoft’s cloud growth narrowly missed tough expectations

Alphabet delivered its first-ever $100 billion quarter, silencing the doubters with standout performances in both Search and Cloud. AI Overviews and AI Mode are clearly resonating with users, helping to ease fears that Google’s core search business is under threat from generative AI. With ChatGPT’s recent browser demo falling short of a game-changer, Google looks well placed to put up a strong defence as gatekeeper to the internet.

Cloud’s 34% growth is another bright spot, reinforcing the broader AI investment thesis and echoing the strength seen in Microsoft’s results. A raised capex guide and a $155 billion cloud backlog show Alphabet is gearing up for long-term AI leadership - this was a flex from a tech titan with a point to prove.

Meta’s quarter highlighted a familiar tension: strong user engagement versus rising costs. The company’s platforms continue to see impressive activity, helped by AI-driven improvements, but investors focused on two negatives - lower growth for the next quarter and a sharp increase in spending plans. Zuckerberg is betting heavily on AI infrastructure, which means profits will likely come under pressure in the near term. He argues this is essential to secure a bigger long-term opportunity, but the trade-off is clear: higher costs now for uncertain future gains. For some, that’s a reasonable risk; for others, it’s a concern given how much control rests with one person.

Microsoft delivered another strong quarter, though the market response was muted because Azure growth came in slightly below very high expectations. Even so, 39% growth is exceptional, and the underlying message is positive: demand for AI services is so strong that Microsoft can’t build capacity fast enough. That supply challenge is expected to last into 2026, which suggests demand isn’t slowing. The company raised its investment plans again to keep pace, reinforcing confidence in AI as a long-term growth driver. While the slight miss grabbed headlines, the bigger picture is that Microsoft remains a central player in the AI boom.

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