Amazon and Alphabet have seen significant stock increases this year, according to The Motley Fool. As of the latest data, Amazon’s shares have risen by about 8%, while Alphabet’s stocks have surged roughly 13% year to date.
What happened
Amazon and Alphabet are two prominent players in the artificial intelligence (AI) sector. Amazon’s cloud computing arm, Amazon Web Services (AWS), generated $37.6 billion in revenue during the first quarter of 2026, marking a year-over-year growth of 28%. CEO Andy Jassy noted,
“It’s very unusual for a business to grow this fast on a base this large.”
Meanwhile, Alphabet’s Google Cloud segment achieved a staggering 63% revenue growth, reaching $20 billion in the same period.
The growth trajectories for both companies reflect their extensive investments in AI. Amazon has aggressively spent on capital projects, forecasting about $200 billion in expenditures for 2026. Although its trailing twelve-month free cash flow has decreased to approximately $1 billion, the company’s various sectors, including a burgeoning custom-chips initiative, continue to thrive. Additionally, Alphabet’s cloud backlog now exceeds $460 billion, with CEO Sundar Pichai highlighting that,
“Our enterprise AI solutions have become our primary growth driver for Cloud for the first time.”
Why it matters
The success of Amazon and Alphabet is pivotal, not only for their financial health but also for the trajectory of the AI industry. As both companies continue to heavily invest in AI infrastructure, their performance will likely influence market trends and technological advancements. Their capital expenditures signal a strong commitment to long-term growth in a rapidly evolving field.[1]
Background
On May 20, 2025, Amazon and Alphabet announced plans to enhance their AI capabilities significantly, citing the need for a robust infrastructure to support future innovations. As of April 2026, both companies began revealing substantial revenue growth figures, underscoring the effectiveness of their investments. The robust demand for cloud services has been a driving force behind their increasing revenues.[2]
What’s next
Amazon and Alphabet will provide further updates regarding their financial performance and strategic initiatives in their upcoming quarterly earnings reports scheduled for July 2026. These disclosures are anticipated to provide more insight into their AI investments and revenue projections for the second half of the year.
