Google and Microsoft Just Proved the AI Trade Is Alive—While OpenAI Is Sweating
In briefGoogle Cloud hit $20.03 billion in Q1 2026—up 63% year-over-year—while Microsofts AI business surpassed a $37 billion annual revenue run rate, up 123% year-over-year.Alphabets total Q1 revenue reached $109.9 billion, its fastest growth rate since 2022; Microsoft posted $82.9 billion in revenue, up 18%.OpenAI missed its own internal revenue and user targets in recent months, with CFO Sarah Friar reportedly warning the company may struggle to fund future compute contracts. Wednesday was a bad day to be an AI doomer. Microsoft and Alphabet, Google‘s parent company, both reported earnings after the bell, and both crushed expectations—on the same day OpenAI’s revenue stumbles were still reverberating through the market. The message from the two biggest players in enterprise cloud was hard to miss: The AI trade isn‘t slowing down. If anything, it’s accelerating. Alphabet posted $109.9 billion in Q1 2026 revenue, up 22% from a year ago and the companys fastest growth rate since 2022. Wall Street was expecting around $107.1 billion. The headline number is Google Cloud, which brought in $20.03 billion—up 63% year-over-year from $12.26 billion in Q1 2025, and nearly $1.6 billion above analyst estimates. CEO Sundar Pichai said enterprise AI solutions had become “our primary growth driver for cloud