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Good morning, investors. We just had a convincing candidate for the most eventful day of the year.
Between Jerome Powell’s final press conference, Kevin Warsh moving one step closer as successor, and $12 trillion worth of earnings results, there’s a lot to unpack.
Wednesday also marked the day that the S&P 500 reached a 100% gain since its October 2022 bottom.
Heady stuff.
Let’s dig into Big Tech.
Alphabet’s world
Four hyperscalers reported earnings within minutes of each other Wednesday but only one stock went up right away.
Alphabet rose roughly 7% while Microsoft, Meta and Amazon all sold off immediately after earnings, despite earnings beats from each name.
The rally promoted Google from a participant in the AI arms race to a pace setter.
The chart below illustrates the first hour of stock moves after earnings compared to spending ambitions and market cap.
Notably, Amazon ended up rallying in the hours after I made this visual.
Still, the after-hours market reaction looked as if investors would judge every company’s capex plans against Alphabet's ability to turn the same spending into visible ad and cloud cash flow.
Here’s how the four Big Tech names performed in the latest quarter:
Alphabet: Revenue rose 22% to $109.9 billion, EPS jumped 82% to $5.11
Google Cloud accelerated to 63% growth at $20 billion, with backlog nearly doubling quarter-over-quarter to $460 billion
Microsoft: Revenue rose 18% to $82.9 billion, Azure grew 40%, and EPS climbed 23% to $4.27.
Commercial remaining performance obligation hit $627 billion, up 99%
Meta: Revenue rose 33% to $56.3 billion, EPS reached $10.44
Raised 2026 capex guidance to $125–145 billion from $115–135 billion
Amazon: Net sales rose 17% to $181.5 billion.
AWS hit its fastest growth in 15 quarters at 28% to $37.6 billion
To be clear, the numbers themselves were not the problem for Big Tech.
Each of the four Magnificent 7 names beat consensus estimates on revenue and earnings, and Microsoft and Amazon both showed the cloud acceleration that AI bulls were looking for.
The sudden divergence between Alphabet and everyone else, though, highlighted the markets’ fixation on near-term over long-term revenue.
Meta's capex range moved up by $10 billion in a single quarter
Amazon's $200 billion 2026 commitment is now larger than its trailing-twelve-month operating income
The math seems to work best for the Google parent company.
Cloud growth is ramping up, search held a 19% revenue growth rate, and Gemini API tokens rose 60% from the previous quarter all while operating margin expanded.
Hyperscaler capex for the rest of the year will be benchmarked against Alphabet’s latest earnings performance, at least according to the market’s first reaction.
Big Tech companies that fall short on ROI will be penalized for spending less efficiently than that new standard.
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Elsewhere
📊 The Federal Reserve held interest rates steady in Jerome Powell's final meeting as chair. It marked the third consecutive hold. Four Fed members dissented the decision, and Powell said he plans to stay on as a Fed governor. (Yahoo Finance)
🏦 Kevin Warsh cleared the Senate approval hurdle. The committee voted to advance his nomination, even as Senator Elizabeth Warren slammed him for eroding central bank independence. (CNBC)
📉 Robinhood shares dropped more than 10% after missing on earnings estimates. Crypto trading fees collapsed 47% from a year earlier even as funded accounts climbed to a record 27.4 million. (WSJ)
Rapid-fire
Gas prices hit the highest level since July 2022 (Yahoo Finance)
Elon Musk and Sam Altman continued to battle in court over OpenAI (CNBC)
Starbucks stock jumped 8% with investors cheering its earnings beat (Yahoo Finance)
President Trump said it is “great” that UAE pulled out of OPEC (CNBC)
Seagate stock climbed double digits to record after strong earnings (Guru Focus)
Chipotle posted a surprise sales beat and the stock jumped after hours (CNBC)
These 2 large-cap stocks have grown free cash flow in the age of hyperscaler capex (ProCap Insights)
S&P 500 companies are reporting higher profits than ever (Opening Bell Daily)
📈Beyond the news. Get a high-conviction stock pick every Sunday with Best Ideas Club. Our members-only portfolio is up 21% this year, crushing the S&P 500’s 4% return.
On this day
🗓 April 30, 1803: The US signed the Louisiana Purchase Treaty in Paris, buying 828,000 square miles from France for $15 million. The deal doubled the size of the country and remains one of the most lopsided real-estate transactions in history.
Last thing
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