- Google Cloud revenue surged 63% year-over-year to $20.03 billion in Q1 2026, with enterprise AI becoming its primary growth driver.
- Microsoft‘s AI business hit a $37 billion annual revenue run rate, up 123% year-over-year, as its Copilot assistant exceeded 20 million paid users.
- OpenAI missed internal revenue and user targets, with its CFO warning the company may struggle to fund future compute contracts.
- Alphabet and Microsoft both posted significant revenue beats, with total revenues of $109.9 billion and $82.9 billion, respectively.
On Wednesday, April 29, 2026, Alphabet and Microsoft delivered blockbuster earnings that crushed Wall Street expectations. The results demonstrated the accelerating AI trade, with both tech giants posting their fastest growth in years. Google Cloud revenue hit $20.03 billion, up 63% year-over-year and nearly $1.6 billion above estimates according to reports. CEO Sundar Pichai stated enterprise AI solutions had become “our primary growth driver for cloud for the first time in Q1.”
Microsoft wasn’t far behind, reporting $82.9 billion in revenue and an AI business with a $37 billion annual run rate according to its earnings release. Its Copilot assistant now exceeds 20 million paid users, up from 15 million last quarter. Meanwhile, OpenAI faced a stark contrast after missing its own internal revenue and user targets. CFO Sarah Friar reportedly warned the company may struggle to fund future compute contracts, news which sent related stocks tumbling.
Consequently, the market response highlighted the divergence between established cloud giants and the AI pioneer. Alphabet’s total Q1 revenue reached $109.9 billion, its fastest growth rate since 2022. Microsoft Cloud overall hit $54.5 billion in revenue, up 29% year-over-year. All of this growth is fueled by the relentless AI boom, with Google’s Cloud backlog hitting $460 billion. Alphabet now guides 2026 capital expenditures between $175 billion and $185 billion.
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