Meta and Alphabet report record growth amid massive AI investment

Alphabet and Meta both exceeded market expectations on Wednesday, delivering their fastest growth rates in several years. Despite these upbeat financial results, investors reacted with starkly different sentiments.

Alphabet shares jumped 7% in extended trading following news of a 20% revenue increase and a 63% surge in cloud revenue.

Conversely, Meta stock fell by 7%, as shareholders grappled with the company’s lack of a cloud infrastructure business to offset its substantial artificial intelligence investments.

Meta Chief Executive Mark Zuckerberg spent significant time during the earnings call defending a revised capital expenditure forecast, which now sits between $125 billion and $145 billion.

He argued that heavy investment is vital for improving user engagement and advertiser value, noting that sales had actually jumped 33% from the previous year.

To improve efficiency, the firm is developing custom silicon with Broadcom while incorporating AMD and Nvidia chips into its systems.

Meta CFO Susan Li added that the company’s contractual commitments rose by $107 billion this quarter due to new infrastructure agreements.

Meanwhile, Alphabet updated its 2026 capital expenditure guidance to a range of $180 billion to $190 billion. Chief Executive Sundar Pichai attributed the momentum to high demand for AI solutions and the success of homegrown tensor processing units.

Alphabet now boasts a cloud backlog of $460 billion, nearly double the previous quarter. As the generative AI boom continues, the firm appears better positioned to monetise its bets immediately, whereas Meta investors remain focused on when new revenue streams from proprietary models will finally come to fruition.