Google · CNBC Technology
Investors still trust Google more than Meta when it comes to spending their money on AI
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Meta and Alphabet both beat expectations in their earnings reports on Wednesday, each recording their fastest growth in years.
Key facts
- Alphabet on Wednesday updated its 2026 capex guidance range to $180 billion to $190 billion, up from its previous estimate of $175 billion to $185 billion
- Heading into the earnings reports, Alphabet's stock price was up 118% over the past year, trouncing Meta's 21% gain
- The spending forecast was coupled with revenue growth of 20%, the fastest for any quarter since 2022
- She added that Meta's recent "multi-year cloud deals and our infrastructure purchase agreements" contributed to a $107 billion jump in contractual commitments during the quarter
Summary
But despite their similarly upbeat results, Wall Street had different reactions. It's the continuation of a theme that's hampered Meta throughout much of the generative AI boom. That makes AI spending a harder sell for Meta CEO Mark Zuckerberg, because the return on investment has to show up elsewhere, and that mostly means increased ad revenue and profitability. All four tech giants reported quarterly results on Wednesday.