AI Daily: AI spending takes center stage as big tech reports earnings

Catch up on the top artificial intelligence news and commentary by Wall Street analysts on publicly traded companies in the space with this daily recap compiled by The Fly.

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RESULTS: Microsoft (MSFT) reported Q3 EPS of $4.27 and revenue of $82.89B, both better than the consensus of $4.07 and $81.43B, respectively. The company said its AI business surpassed annual revenue run rate of $37B. “We are focused on delivering cloud and AI infrastructure and solutions that empower every business to eval-max their outcomes in the agentic computing era,” said Satya Nadella, chairman and chief executive officer of Microsoft. “Our AI business surpassed an annual revenue run rate of $37B, up 123% year-over-year.”
Microsoft said it sees Q4 revenue of $86.7B-$87.8B, with consensus at $87.65B, and Q4 Intelligent Cloud revenue of $37.95B-$38.25B.

Meta Platforms (META) also reported earnings, with Q1 EPS coming at $10.44 and revenue at $56.31B, with consensus at $6.82 and $55.56B. “We had a milestone quarter with strong momentum across our apps and the release of our first model from Meta Superintelligence Labs,” said Mark Zuckerberg, Meta founder and CEO. “We’re on track to deliver personal superintelligence to billions of people.” The company said, “We expect second quarter 2026 total revenue to be in the range of $58-61 billion. Our guidance assumes foreign currency is an approximately 2% tailwind to year-over-year total revenue growth, based on current exchange rates.”

“We expect full year 2026 total expenses to be in the range of $162-169 billion, unchanged from our prior outlook. We continue to expect to deliver operating income this year that is above 2025 operating income. We anticipate 2026 capital expenditures, including principal payments on finance leases, to be in the range of $125-145 billion, increased from our prior range of $115-135 billion. This reflects our expectations for higher component pricing this year and, to a lesser extent, additional data center costs to support future year capacity. Absent any changes to our tax landscape, we expect our tax rate for the remaining quarters of 2026 to be between 13-16%. Lastly, we continue to monitor active legal and regulatory matters, including headwinds in the EU and the U.S. that could significantly impact our business and financial results. For example, we continue to see scrutiny on youth-related issues and have additional trials scheduled for this year in the U.S., which may ultimately result in a material loss,” Meta added.

Meanwhile, Amazon (AMZN) reported Q1 EPS of $2.78 and revenue $181.5B, with consensus at $1.65 and $177.17B. “We’re making customers’ lives easier and better every day across all our businesses, and their response is driving significant growth,” said Andy Jassy, President and CEO, Amazon. “AWS is growing 28% (our fastest growth in 15 quarters) on a very large base, our chips business topped a $20 billion revenue run rate (growing triple digits year-over-year), Advertising grew to over $70 billion in TTM revenue, and unit growth in our Stores reached 15% (the highest since the tail end of covid lockdowns). We also hit exciting milestones with delivery speed (more than 1 billion items same-day or overnight in 2026 and counting), Project Hail Mary (nearly $615 million at the box office to date and the second most successful non-sequel, non-franchise opening of recent memory), and Amazon Leo continues to resonate with prospective customers, with Delta Airlines the latest to sign on. We’re in the middle of some of the biggest inflections of our lifetime, we’re well positioned to lead, and I’m very optimistic about what’s ahead for our customers and Amazon.”

Amazon.com said it sees Q2 revenue in the range of $194.0B-$199.0B, with consensus at $188.86B. This guidance anticipates an unfavorable impact of approximately 10 basis points from foreign exchange rates. Operating income is expected to be between $20.0B and $24.0B, compared with $19.2B in second quarter 2025. This guidance assumes that Prime Day occurs in second quarter 2026.

Lastly, Alphabet (GOOGL) reported Q1 EPS of $5.11 and revenue of $109.9B, with consensus at $2.67 and $107.03B, respectively. Sundar Pichai, CEO of Alphabet and Google, said “2026 is off to a terrific start. Our AI investments and full stack approach are lighting up every part of the business. Search had a strong quarter with AI experiences driving usage, queries at an all time high, and 19% revenue growth. Google Cloud revenues grew 63% with backlog nearly doubling quarter on quarter to over $460 billion. This was our strongest quarter ever for our consumer AI plans, driven by the Gemini App. Overall the number of paid subscriptions has now reached 350 million, with YouTube and Google One being the key drivers. Gemini Enterprise has great momentum with 40% quarter on quarter growth in paid monthly active users. And, finally, I’m pleased to see Waymo surpass 500,000 fully autonomous rides a week. These outstanding results are built on our differentiated, full stack approach. Our first-party models, like Gemini, are now processing more than 16 billion tokens per minute via direct API use by our customers, up 60% from last quarter. It’s really exciting to see how our AI investments are delivering value for our users, customers and business.”

Additionally, Alphabet said Gemini Enterprise paid monthly active users grew 40% quarter-over-quarter, and that AI investments and full stack approach are driving performance across business. Alphabet raised its FY26 CapEx view to $180B-$190B from $175B-$185B, stating on its quarterly call that the new capital expenditure guidance now includes its investment related to the acquisition of Intersect, which closed in March.

MYTHOS EXPANSION: Anthropic recently proposed allowing 70 additional companies and organizations to use its AI model Mythos, which would have brought the total number of entities with access up to 120, but the White House has opposed the plan, Robert McMillan and Amrith Ramkumar of The Wall Street Journal report, citing people familiar with the matter. Administration officials opposed the move due to concerns related to security, the sources added.

Meanwhile, the White House is developing guidance for government agencies to get around Anthropic’s supply chain risk designation and onboard models like Mythos, Maria Curi and Ashley Gold of Axios report, citing sources.

FUNDING OFFERS: Anthropic is considering a new funding round that could value it above $900B, reflecting rapidly rising investor demand and potentially surpassing rivals in valuation among AI startups, Bloomberg’s Shirin Ghaffary, Natasha Mascarenhas, and Edward Ludlow report. The discussions come as the company explores aggressive expansion of infrastructure to support surging usage of its Claude models and continues to weigh a possible IPO as soon as October, according to people familiar with the matter. Google (GOOGL) recently committed to invest $10B in Anthropic at a $350B valuation, while Amazon (AMZN) is also investing $5B in Anthropic at a $350B valuation, with plans to inject $20B more over time.