The recent earnings reports from four of the largest tech companies, collectively known as the Magnificent Seven, reveal that they are still committed to their substantial artificial intelligence spending plans for the year. The companies in question, including Microsoft, Alphabet, Meta, and Amazon, boast a combined market capitalization of approximately $12 trillion. Although most of these companies did not provide detailed breakdowns of their AI expenditures in their latest reports, the indications are that they will continue to invest heavily in this area. Previously, an analysis by Bridgewater Associates suggested that these four companies would collectively spend around $650 billion on AI infrastructure in 2026.
The ongoing investment in AI has significant consequences 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 possess the necessary data centers and infrastructure to support large-scale AI computing operations. As they face declining profit margins due to lower bitcoin prices and increased competition, miners have begun to lease their data centers to AI firms to diversify their revenue streams.
Stocks related to AI and bitcoin mining, such as IREN, TeraWulf, and Cipher Digital, experienced fluctuations in value following the earnings reports. Meanwhile, the share prices of the tech giants also saw significant movements, with Microsoft down by over 2.4%, Alphabet up by 6%, Meta down by 6.6%, and Amazon down by 3.7% in after-hours trading.
Bitcoin itself was down by about 0.9% over the last 24 hours. The next major test of market sentiment and the mining sector will come when chipmaker Nvidia reports its earnings on May 20. The earnings reports from the tech giants provided valuable insights into their performances and future plans. Microsoft reported fiscal Q3 2026 revenue of $82.9 billion, exceeding the consensus estimate of $81.4 billion, with earnings per share of $4.27, surpassing the expected $4.06.
According to Microsoft CEO Satya Nadella, the company's AI business generated $37 billion in revenue, representing a 123% year-over-year increase. 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. CEO Sundar Pichai emphasized the importance of AI investments, citing gains in Search and Cloud as evidence of AI-driven demand. Google Cloud revenue rose by 63% to $20 billion, fueled in part by enterprise AI solutions and infrastructure.
Alphabet reported Q1 2026 revenue of $109.9 billion, beating the consensus estimate of $107 billion, with earnings per share 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 earnings per share of $2.78, exceeding the expected $1.63.
AWS revenue came in at $37.6 billion, beating the estimated $36.92 billion. Amazon noted a significant decline in free cash flow over the past year, primarily due to a $59.3 billion increase in purchases of property and equipment, which reflects the company's substantial investments in artificial intelligence. Meta reported $19.84 billion in capital expenditures for the quarter and raised its full-year outlook to $125-145 billion, up from the previous guidance of $115-135 billion. The increase is attributed to higher component pricing and additional data center costs to support future capacity, underscoring the company's significant investment in AI.
CEO Mark Zuckerberg described the quarter as a milestone in AI progress, stating that the company is on track 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 earnings per share of $10.44, exceeding the expected $6.67.