Mag 4 Capex & Cloud Recap: $725B CapEx, Who’s Going to Secure the Bag?

Tiger_comments
05-01
Reward Tiger-CoinsReward 500 Tiger-coins

Markets rally prompted by good earnings. Big Tech took turns proving the bull case, recovering March's tariff-driven selloff.

How's everything going so far?

  1. $Alphabet(GOOG)$ surged +10% in a single session after Cloud revenue grew +63.4%, killing the "Google is losing the AI race" narrative.

  2. $Apple(AAPL)$ +2.56% post-earnings on a record March quarter.

  3. $Amazon.com(AMZN)$ posted $23.9B in operating income, a 14% beat.

  4. $Meta Platforms, Inc.(META)$ delivered +28.7% ad revenue growth but lost 9% due to capex concerns.

  5. $Microsoft(MSFT)$ is worse, still the worst performer among mag 7. Its capex slows down.

Another company affected by the mag earnings is$$NVD$$ -5%, falling back below the $5T market cap.

A new high-efficiency model release that the market read as "better models = less compute demand." But $725B in committed hyperscaler CapEx is already locked, B300 servers pricing near $1M, and supply tightness hasn't changed.

Let's take a look at the most important parts: capex and cloud.

💰 CapEx Summary

Cloud Revenue Comparison: Constrained by supply — not by demand.

Google Cloud's acceleration was the biggest surprise of the night: +63.4% from +48% last quarter, Cloud op margin cracking 30% for the first time.

Management's exact words: "If we had more compute, cloud revenue would have been higher."

——————-

Jefferies analyst Brent Thill: "We're seeing bottlenecks across the board" — memory, fiber, power, cooling water, undeveloped land.

Every layer in the AI infrastructure stack is supply-constrained and repricing. $725B of committed spend means the picks-and-shovels trade just got a hard floor under it.

$725B in committed CapEx. Who actually captures it?

How do you view the sky-high capex?

Leave your comments to join our Mag7 series to win at least 5 tiger coins~

Amazon Q1: AWS 4Y Growth High, But Capex Concerns Loom?
Amazon (AMZN) edged up just 0.77% today despite Q1 results showing AWS revenue grew 28% year-over-year — its fastest single-quarter growth rate in nearly four years — corroborating alongside Google Cloud the certainty of hyperscaler AI compute demand. Analysts noted that both companies' cloud growth trajectories provide clear near-term demand visibility for chip suppliers including Nvidia. The AWS acceleration story is now well established, but when will elevated AI capital expenditure translate into visible margin improvement?
Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.
Reward 500 Tiger-coinsDeadline to 05/14 08:15
The originator will select the best recovery and allocate Tiger coins before the reward ends
Reward-post

Comments

  • Shyon
    05-02
    Shyon
    From my perspective, this rally is more than just earnings — it confirms AI demand is still strong and supply-constrained. $Alphabet(GOOGL)$ Cloud surge and solid results from $Amazon.com(AMZN)$ and $Apple(AAPL)$ show hyperscalers aren’t slowing, just reallocating capital more efficiently.

    On capex, I don’t see a bubble — I see barriers forming. Despite concerns around $Meta Platforms, Inc.(META)$ and $Microsoft(MSFT)$ , the key takeaway is unchanged: demand exceeds supply, and constraints are real, not cyclical excess. To me, this looks like early-stage infrastructure buildout rather than late-cycle overinvestment.

    For the $725B spend, I still favor the infrastructure layer like NVIDIA. Efficiency gains won’t kill demand — they expand it. This looks like a narrative-driven pullback, not a structural shift.

    @TigerStars @Tiger_comments @TigerClub

  • koolgal
    05-02
    koolgal
    🌟🌟USD 725 billion spending spree: Who is actually getting rich while Big Tech spends:

    The Silicon Kings : $NVIDIA(NVDA)$ $Taiwan Semiconductor Manufacturing(TSM)$ $Broadcom(AVGO)$ are the 3 winners.  Every dollar Big Tech spends goes to these 3 companies.

    Nvidia is no longer just selling chips.  It is selling AI factories. At March 2026 GTC, CEO Jensen Huang unveiled the Vera Rubin platform.  This isn't just a GPU.  It is a vertically integrated system of 7 new chips designed to act as a single supercomputer.

    Broadcom:  It is the King of connectivity & custom silicon. 
    As AI clusters scale to millions of chips, the bottleneck is communication.  Broadcom Tomahawk 6 switch holds an estimated 80% market share in high speed Ethernet.

    Broadcom co develops custom AI chips XPU for Meta & Google's TPU.

    TSMC is the Foundry to the world.  It is mass producing 2nm chips in early 2026.

    These are the Big 3 companies getting Big Tech money.

    @Tiger_comments @Tiger_SG @TigerStars

  • BTS
    03:14
    BTS
    The Mag 4, Microsoft (MSFT), Alphabet (GOOG), Amazon (AMZN), and Meta Platforms (META), have entered a major phase of the AI arm race, with $725 billion in combined capital expenditure (CapEx) projected for 2026。。。

    MSFT and GOOG lead the fiscal charge with record hardware investments; AMZN and META follow with multi-billion-dollar allocations to dominate the cloud market

    Capturing CapEx depends on execution and partnerships; cloud providers, semiconductor makers, and infrastructure integrators stand to benefit; differentiation and supply chain strategy will determine the winners

    Sky-high CapEx reflects confidence in digital transformation, AI, and cloud; inflation and global risks may temper returns, long-term trends support continued deployment, efficiency, scalability, and strategic alignment remain key

    The market has shifted from a "Chip Story" to an "Infrastructure Story"; $725B is captured by those controlling land, power, and cooling, while the Mag 4 race to monetize capacity

  • Mkoh
    05-04 18:37
    Mkoh
    Alphabet (GOOG) is leading. Google Cloud exploded +63% year-over-year to $20B in Q1, with operating margins near 33% and a backlog that nearly doubled to over $460B. Shares surged post-earnings, silencing doubts about Google’s AI position as heavy capex ($180-190B guided) starts delivering high-margin growth.
    Amazon (AMZN): AWS grew ~28% (fastest in 15 quarters) and delivered a strong operating income beat. Solid returns on ~$200B capex.
    Meta (META): Strong ad revenue (+28-33%), but shares fell on higher capex guidance ($125-145B) as AI monetization remains more indirect.
    Microsoft (MSFT): Azure growing well (~40%), yet the stock has lagged peers amid massive ~$190B spending and questions on return timing.

    Apple continues with low capex intensity and strong services margins.Bottom Line: Among the big AI spenders, Alphabet currently shows the best bang for the buck


  • 這是甚麼東西
    05-03
    這是甚麼東西
    Capture of the $725B SpendThe $725 billion capital expenditure is concentrated in physical infrastructure, with Nvidia dominating compute, while Vertiv, Eaton, and Arista Networks capitalize on power, cooling, and networking bottlenecks. Specialized REITs like Equinix and Digital Realty are also extracting premiums for power-secured real estate.
  • MHh
    05-02
    MHh
    I see this as temporary only. Many individuals and companies are starting to see the potential of AI and many are jumping onto the bandwagon. While AI is promising, none has set done to carefully calculate the cost of it. AI is not free and could be more expensive than the exact manpower savings that it boost of. Who is studying the balance sheets? This supply constraint is driven in part by hype and fomo-mindset. When the dust settles, capex has to come down. Also, even with more use cases, there will also be more competition and this will further drive prices and capex down. We are seeing this with Nvidia already. It is impossible for any of these AI companies to charge at a premium forever. I do see the capex coming down within 2 to 3 years. All is good while the music lasts. These companies are good but I will take profit soon and re-enter at a lower price if these are still competitive against their new competitors.
Leave a comment
45
17