The recent quarterly earnings reports from four of the largest tech companies, collectively known as the Mag 7, indicate that they are still on course to meet their substantial artificial intelligence (AI) expenditure targets for the year. Microsoft, Alphabet, Meta, and Amazon, which have a combined market capitalization of approximately $12 trillion, reported their quarterly earnings on Wednesday.
Although most of these companies did not provide detailed breakdowns of their AI spending in their latest earnings reports, they appear to be proceeding with their significant investments in the sector. An earlier analysis by Bridgewater Associates estimated that these four companies would collectively spend around $650 billion on AI infrastructure in 2026. The continued investment in AI has notable implications for the digital asset sector, particularly for bitcoin miners who are increasingly shifting their focus from mining to hosting AI computing services as part of their revenue diversification strategy.
Many bitcoin miners already have the necessary data centers and infrastructure in place to support large-scale AI computing operations. Due to decreasing bitcoin prices and intensified competition, miners have begun to offer their data centers to AI companies to expand their revenue streams.
Stocks related to AI and bitcoin mining, such as IREN, TeraWulf, and Cipher Digital, experienced fluctuations following the earnings reports. Microsoft's stock was down by around 2.4% in after-hours trading, while Alphabet's stock rose by 6%, Meta's fell by 6.6%, and Amazon's decreased by 3.7%.
Bitcoin's price dropped by approximately 0.9% over the last 24 hours. The upcoming earnings report from chipmaker Nvidia on May 20 is expected to be a significant test of overall market sentiment and its impact on miners. The earnings reports from the tech giants provided insights into their performance and strategies.
Microsoft reported fiscal Q3 2026 revenue of $82.9 billion, exceeding the consensus estimate of $81.4 billion, with earnings per share (EPS) of $4.27, surpassing the expected $4.06. Microsoft's AI business generated $37 billion in revenue, representing a 123% year-over-year increase. Satya Nadella, Microsoft's chairman and CEO, emphasized the company's focus on delivering cloud and AI infrastructure and solutions. Alphabet highlighted AI as a key driver of growth and reported capital expenditures of $35.67 billion for the quarter, slightly below the estimated $36.39 billion.
Alphabet's CEO, Sundar Pichai, attributed gains in Search and Cloud to AI-driven demand, with Google Cloud revenue rising 63% to $20 billion. Alphabet reported Q1 2026 revenue of $109.9 billion, beating the consensus estimate of $107 billion, with EPS of $2.81, exceeding the expected $2.63. Amazon reported Q1 2026 revenue of $181.5 billion, surpassing the consensus estimate of $177.2 billion, with EPS of $2.78, beating the expected $1.63. Amazon's AWS revenue reached $37.6 billion, exceeding the estimated $36.92 billion.
The company noted a significant drop in free cash flow due to increased infrastructure spending, primarily driven by AI investments. Meta reported $19.84 billion in capital expenditures for the quarter and raised its full-year outlook to $125-145 billion, reflecting higher component pricing and additional data center costs to support future capacity.
Meta's CEO, Mark Zuckerberg, described the quarter as a milestone in the company's AI progress, aiming to deliver personal superintelligence to billions of people. Meta reported Q1 2026 revenue of $56.31 billion, beating the consensus estimate of $55.5 billion, with EPS of $10.44, exceeding the expected $6.67.