Google Cloud Posts Record 63% Growth as Amazon, Microsoft Also Beat Estimates on AI Demand

All three dominant cloud infrastructure providers exceeded analyst expectations in first-quarter earnings released Wednesday, with Google Cloud emerging as the clear standout — posting its fastest growth rate since Alphabet began breaking out cloud results in 2020.

Google Cloud revenue climbed 63% year over year to $20.03 billion, well above the $18.05 billion consensus estimate from StreetAccount. Amazon Web Services, which leads the market, grew 28% to $37.6 billion, also topping analyst projections by roughly $1 billion. Microsoft Azure and other cloud services expanded 40%, edging past StreetAccount's estimate of 39.3%.

Synergy Research analyst John Dinsdale estimated total cloud infrastructure spending reached $129 billion during the quarter. "Wow, that was some quarter," Dinsdale said in an email following the results. "Our forecasts point to sustained strong growth in the years ahead, with AI continuing to drive usage, unlock new use cases, and boost cloud provider revenues," he added in Synergy's update.

Google's performance was driven in large part by enterprise AI adoption. "Our enterprise AI solutions have become our primary growth driver for cloud for the first time," Alphabet CEO Sundar Pichai said on his company's analyst webcast Wednesday. Pichai added that revenue from products built with Google's generative AI models grew 800%. Alphabet shares rose approximately 7% on Thursday, reflecting investor confidence in the results.

Google is also seeing accelerating traction from its homegrown tensor processing units, which are drawing customers as an alternative to Nvidia's graphics processing units. The company competes directly with OpenAI and Anthropic in the AI model market through its Gemini platform.

At AWS, customer spending on the Bedrock service for building AI agents jumped 170% from the fourth quarter, consuming more tokens in the first quarter than in the service's entire history dating to 2023, Amazon CEO Andy Jassy said on the company's earnings call. The results arrived a day after AWS announced that OpenAI models would come to Bedrock. "OpenAI has said they're already seeing unprecedented demand for this new product, and we're seeing heavy customer interest as well," Jassy said.

Jassy also highlighted the performance of Amazon's custom Trainium silicon. "Our Trainium2 chips offer roughly 30% better price-performance than comparable GPUs, and has largely sold out," he said. "Trainium3, which just started shipping at the start of 2026 and is 30-40% more price-performant than Trainium2, is nearly fully subscribed." Amazon disclosed it now holds more than $225 billion in revenue commitments tied to its latest generation of Trainium chips.

Amazon's overall first-quarter earnings per share came in at $2.78 on revenue of $181.52 billion.

Microsoft CEO Satya Nadella said the number of customers adopting Anthropic and OpenAI models through Microsoft's platform doubled from the prior quarter. Management guided for second-quarter Azure growth of 39%, or 40% at constant currency, above StreetAccount's consensus of 37%.

The three companies' AI buildout carries a substantial price tag. Collectively, they told investors they expect to spend close to $600 billion on capital expenditures this year, underscoring the scale of infrastructure investment required to sustain current growth trajectories.

Competition is also emerging from smaller providers. So-called neocloud companies — a group that includes CoreWeave and Nebius — now hold 5% of the cloud infrastructure market, according to Synergy Research's Dinsdale.

With all three hyperscalers reaccelerating growth and raising spending guidance simultaneously, the coming quarters will test whether AI-driven cloud demand can justify the capital commitments already on the books — and whether the neocloud segment's market share gains continue to erode the incumbents' dominance.

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