Key Facts on Cloud Growth of Amazon and Alphabet
Amazon Web Services (AWS) reported a revenue increase of 28% year over year in Q1 2026, totaling $37.6 billion, marking its fastest growth in over three years. This growth follows an acceleration from 24% in Q4 2025. Meanwhile, Alphabet’s Google Cloud achieved a remarkable 63% year-over-year growth, generating $20 billion in the same quarter, up from 48% in the previous quarter. Both companies are significantly investing in AI infrastructure, with Amazon allocating approximately $200 billion in capital expenditures for 2026, and Alphabet raising its spending guidance to between $180 billion and $190 billion.
Despite their strong growth rates, both companies face risks, including regulatory scrutiny and concerns about high spending potentially outpacing returns. As of now, Amazon holds a trailing-12-month free cash flow of around $1 billion, whereas Alphabet’s equity offering aims to secure over $80 billion to fund its expansion. Both stocks are trading at about 30 times and 27 times their earnings, respectively, indicating they are not cheap but still hold significant long-term potential.
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