The latest Q1 earnings reports from Meta, Microsoft, Amazon, and Alphabet show an uptick in revenue from advertising, with AI playing a key role.
Big tech firms revealed a strong performances in their Q1 2026 earnings report, with Alphabet, Amazon, Meta and Microsoft all seeing advertising growth boost revenue.
Amazon has beat all expectations with one of its strongest quarterly earnings reports ever, with its cloud division driving positive reactions among analysts to see revenue reach $37.6bn, beating the Wall Street prediction by $1bn.
It’s a similar story for Alphabet, Google’s parent company, which exceeded analyst expectations with a 22% rise in revenue down to AI “‘lighting up every part of the business,” said chief executive Sundar Pichai. The company’s cloud backlog soared from $240bn in Q4 2025 to $460bn in Q1 2026 as it looks to take advantage of the AI boom.
For Meta, strong revenue growth hasn’t translated directly into investor confidence. Despite a 33% rise in revenue, driven mostly by advertising, and objective success in a number of metrics outlined in the earnings report, stock still fell 10%. Analyst Doug Anmouth downgraded Meta to neutral from overweight, cutting the target from $825 to $725.
The downgrade came as Meta’s report showed it has raised its full-year capital expenditure guidance to between $125bn and $145bn – up from $115bn to $135bn. That $10bn increase was enough to send the stock down more than 10%, reducing Meta’s market cap by roughly $175bn.
Meanwhile, Microsoft attributes its 18% revenue growth to its AI-driven transformation. “Our planet-scale cloud and AI factory, together with Copilots across high value domains, is driving broad diffusion and real-world impact,” said Satya Nadella, chairman and chief executive officer of Microsoft.
“It’s why we continue to increase our investments in AI across both capital and talent to meet the massive opportunity ahead.”
Amazon: AI agentic tools driving ad growth
Amazon’s solid results are multi-faceted, with strong performances across a number of vertices driving growth for the company as a whole.
Amazon’s net sales rose 17% to $181.5bn in Q1 2026, compared to $155.7bn in Q1 2025. Within this, Amazon Web Services (AWS) segment sales saw a 28% increase year-on-year (YoY), reaching $37.6bn.
Advertising services grew 24% YoY to $17.2bn, which the company attributes, at least in part, to the rise of agentic commerce as well as investment in the development of creative AI tools like Creative Agent. Its AI agent Rufus saw a 400% rise in engagement YoY, and full-funnel expansions and partnerships with Comcast, Samsung, and Netflix all helped yield positive results.
Net income for Amazon rose to $30.3bn, translating to $2.78 per diluted share. This came alongside an operating income increase of $23.9bn, up from $18.4bn in Q1 2025.
“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 chief executive, Amazon.
“Advertising grew to over $70bn in TTM (trailing twelve months) revenue, and unit growth in our stores reached 15% (the highest since the tail end of covid lockdowns)[…] 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.”
Meta: Advertising accounts for most of revenue
Meta reported a 33% rise in revenue to $56.31bn – translating to earnings of $7.31 per share, a 13.7% YoY rise. Majority of that came from its advertising arm, which brought in $55.02bn compared to $41.39bn in Q1 2025.
This growth is driven by healthy demand across Meta’s extensive ad ecosystem, with daily active users averaging over 3.5 billion in March 2026 – outlining a vast audience for advertisers to target.
Ad impressions across the Facebook, Instagram, Messenger, WhatsApp and Threads increased 19% YoY, with the average price per ad also going up by 12% YoY.
“We expect second quarter 2026 total revenue to be in the range of $58-61bn. Our guidance assumes foreign currency is an approximately 2% tailwind to YoY total revenue growth, based on current exchange rates,” the CFO outlook commentary stated.
“We continue to monitor active legal and regulatory matters, including headwinds in the EU and the US. 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 US, which may ultimately result in a material loss.”
This likely refers to the EU Commission finding Meta to be in breach of EU law by failing to prevent children on its platforms.
This comes alongside a landmark finding by a California jury, which determined that YouTube and Meta platforms were designed to be addictive, causing harm to children. This case is expected to be followed by a number of adjacent suits, as big tech faces regulatory resistance.
Alphabet: Google search still growing
Google’s parent company, Alphabet saw a 22% increase in revenue to $109.9bn, with net income rising by 81% to $62.6bn.
Google Services – which includes ads, search and its various platforms and subscriptions – revenue increased by 16% to $89.6bn. It was led by a 19% growth in Google search and other (includes gmail, maps and Google play) with revenue coming in at $60.4bn – up from $50.7 in Q1 2025.
Also under Google Services is subscriptions, platforms and devices, which too saw a 19% growth with revenue reaching $12.38bn, compared to $10.38bn in Q1 2025.
Revenue from ads came in at $77.25bn – a 15.5% increase from the $66.88bn in the same quarter in 2025. While YouTube ads saw an 11% in revenue, going from $8.92bn in Q1 2025 to $9.88bn.
The bulk of Alphabet’s revenue was driven by Google Cloud, which saw a 63% jump from $12.26bn to $20bn, highlighting an industry-wide pattern of cloud growth. It was led by an increase in Google Cloud Platform across enterprise AI solutions and AI infrastructure.
Pichai 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 $460bn.
“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.”
Intense competition from Microsoft, Anthropic, and OpenAI continue to threaten Google’s potential challenges in advertising, but a loyal and extensive user base and infrastructure offers significant opportunities for recovery in this segment.
Microsoft: Focusing on integrating ads
Microsoft recorded a 18% revenue increase bringing the total to $77.7bn. Within that, Azure, Microsoft’s intelligent cloud computing arm, grew 40% – with Microsoft Cloud revenue itself up 26% to $49.1bn.
Microsoft is not competing with Google or Meta’s ad businesses, and is focused on integrating ads into search experiences, enterprise workflows and professional networks rather than looking to scale its ad business.
That being said, Microsoft is expanding its digital advertising presence through its advertising stack, as well as LinkedIn and Bing – and its search and news ad business still grew 16% YoY.
“We delivered a strong start to the fiscal year, exceeding expectations across revenue, operating income, and earnings per share,” said Amy Hood, executive vice president and chief financial officer of Microsoft. “Continued strength in the Microsoft Cloud reflects the growing customer demand for our differentiated platform.”
