Nvidia (NVDA 1.38%) reports earnings on May 20, but conversations about artificial intelligence (AI) tend to start and end with chipmakers. But the companies that are funding the AI boom, such as buying Nvidia chips and building data centers to house them, may be a more interesting place to put new money now.
Total capital investment in 2026 microsoft (MSFT +0.36%), alphabet (Google 0.13%)(GOOG 0.05%)and Amazon (AMZN +0.21%) The total amount reaches approximately $570 billion. This is an unprecedented level of capital allocation even for a large tech company. And while each of these three cloud giants has its own reasons for investors to be excited, the latest quarterly results suggest that the better long-term idea may not be the name investors expect.
Let’s take a closer look at each one here.
Image source: Getty Images.
microsoft
Microsoft may be a software giant, but it’s also an established AI leader, and its business benefits from broad momentum.
Revenue for the third quarter of 2026 (period ended March 31, 2026) increased 18% year-over-year to $82.9 billion, with Azure and other cloud services increasing 40%. Driven by AI demand, Microsoft Cloud revenue exceeds $54 billion.
And the company’s profitability growth has been extraordinary. Microsoft’s third-quarter earnings per share increased 23% year-over-year.
Today’s changes
(0.36%) $1.50
current price
$423.43
Key data points
Market capitalization
$3.1 trillion
daily range
$415.66 – $425.12
52 week range
$356.28 – $555.45
volume
1.7M
average volume
34M
gross profit
68.31%
dividend yield
0.63%
Additionally, the company’s remaining commercial performance obligations (essentially the backlog of future contract revenue) nearly doubled from the year-ago period to $627 billion.
But what’s the most eye-catching figure in the update? Microsoft CEO Satya Nadella said the company’s AI-related businesses are now running at an annual revenue run rate of $37 billion (up 123% year over year).
However, the spending profile to support this growth is high. Microsoft’s chief financial officer, Amy Hood, said the company plans to spend about $190 billion in capital spending for the 2026 calendar year. This is an increase of about 61% from 2025, of which about $25 billion is related to rising memory and component costs. The company also expects capacity constraints to remain through 2026, despite efforts to bring new graphics processing units (GPUs) and storage capacity online.
alphabet
And Alphabet is rising to prominence with the rapid acceleration of its cloud computing business, Google Cloud.
Alphabet’s first quarter sales rose 22% to $109.9 billion. And Google Cloud’s revenue increased 63% to $20 billion. This was a significant acceleration compared to the previous quarter’s 48% growth.
Backlog says the same thing.
Google Cloud’s future contract revenue nearly doubled in the first quarter to about $462 billion, and management said it expects to recognize just over half of its backlog as revenue over the next 24 months.
Today’s changes
(-0.05%) $-0.21
current price
$393.11
Key data points
Market capitalization
$4.8 trillion
daily range
$390.90 -$404.47
52 week range
$163.33 – $404.47
volume
19M
average volume
19M
gross profit
60.43%
dividend yield
0.21%
Meanwhile, Google’s services side, which many investors initially thought would eventually be overtaken by AI, is also holding up well. Search and other revenue grew 19%, and Alphabet CEO Sundar Pichai said queries are at an all-time high, with AI features such as AI Mode and AI Overview driving engagement. The company has also begun selling custom tensor processing units (TPUs) directly to a small group of cloud customers, opening up additional revenue streams related to its in-house silicon.
Amazon
Amazon similarly saw double-digit sales growth and an acceleration in its cloud business.
Net sales for Q1 2026 rose 17% to $181.5 billion, with Amazon Web Services (AWS) increasing 28% to $37.6 billion, the fastest pace for the cloud sector in nearly four years and a sharp increase from 24% growth in Q4 2025. AWS operating income reached $14.2 billion, and the segment’s operating margin rose to approximately 38%.
Today’s changes
(0.21%) $0.56
current price
$264.70
Key data points
Market capitalization
$2.8 trillion
daily range
$262.55 – $268.83
52 week range
$196.00 – $278.56
volume
1.7M
average volume
46M
gross profit
50.60%
Amazon CEO Andy Jassy devoted much of his first-quarter earnings call to the company’s custom silicon.
“Our Trainium2 chips offer about 30% better price performance than comparable GPUs and are mostly sold out,” he said. “Trainium3, which just started shipping in early 2026 and offers 30-40% better price performance than Trainium2, is almost fully booked. And Trainium4, which still has about 18 months until general availability, is already largely booked.”
Overall, Amazon now has major customers such as Anthropic and OpenAI, and more than $225 billion in revenue commitments related to Trainium.
But like Microsoft and Alphabet, this growth profile requires significant spending. Capital spending in the quarter alone reached $44.2 billion, with full-year spending in 2026 on track toward $200 billion.
better buy
Any of these three companies could be the top AI stocks until 2030. But if I had to choose, I’d lean towards Alphabet and Amazon, with Alphabet slightly ahead of Amazon.
Alphabet has the group’s fastest-growing cloud business, a re-accelerating AI-assisted search engine, a custom AI chip program that has begun shipping to external customers, and even a self-driving car business with Waymo, which now completes more than 500,000 fully autonomous trips per week.
Meanwhile, Amazon has talk of re-accelerating AWS, a $20 billion and growing custom chip business with multi-year deals finalized, a fast-growing advertising business with more than $70 billion in trailing 12-month revenue, and structural improvement in retail margins.
Microsoft had a great quarter, and at a price-to-earnings ratio of about 25, the company’s stock is the cheapest of the three. But Azure’s 40% growth rate is lower than Google Cloud’s 63%, and the sheer amount of capital needed to keep up could weigh on free cash flow well into next year.
Of course, each of these names comes with real risks. All three will suffer if AI demand slows before spending catches up. Still, Amazon and Alphabet seem to offer a bit more diversified catalysts at valuations that could pay off in the long run, and in my opinion, Alphabet’s fast-growing, soaring-margin cloud business helps push it out as the ultimate winner.
