Big Tech Q1 earnings split AI winners from losers as Alphabet soars, Meta tumbles

TL;DR:

• The Magnificent Seven (excluding Nvidia, reporting May 20) is on pace for 57% Q1 earnings growth versus a start-of-season estimate of 18% — more than three times the rest of the S&P 500’s expected 16%.
• Alphabet jumped 10% on Thursday and is up 23% year-to-date — by far the best Magnificent Seven performance — while Meta tumbled more than 8% on debt-funded capex concerns and is down 7.8% YTD.
• The single-day market-cap swing between Alphabet and Meta after earnings was £450bn ($566bn); Microsoft fell 4% on a $190bn 2026 capex forecast and is the worst Magnificent Seven performer this year.

Bloomberg reports investors are now actively separating AI capex stories that translate to revenue (Alphabet’s Cloud and AI products business, Amazon’s record AWS growth) from those that have not yet (Meta’s debt-funded capex, Microsoft’s accelerating spend). The Philadelphia Stock Exchange Semiconductor Index closed at a record on Friday, extending its 2026 gain to 50%, as picks-and-shovels suppliers continue to benefit from the spending whether or not the spenders themselves do.

Context

The earnings split is the clearest signal yet that the AI trade is fragmenting along revenue-conversion lines rather than splitting tech-versus-everything-else. Alphabet’s TPUs are now in such demand that Sundar Pichai said the company will soon sell access for use in customers’ own data centres. Amazon disclosed its homegrown AI chip business has exceeded a $20bn revenue run-rate. Qualcomm’s shares jumped up to 15% on Thursday after disclosing a top hyperscaler will use its data centre chips later this year — its best session in over a year.

Apple was the other clear winner: shares climbed 3.3% on Friday after the company forecast up to 17% revenue growth in the current quarter, far above expectations. The seven biggest S&P 500 names are responsible for more than half the index’s recovery from its 30 March low.

For UK institutional investors, the Bloomberg analysis lands at a useful moment. UK pension funds and asset managers have largely tracked the Magnificent Seven through index exposure rather than active selection. Today’s Cerebras IPO pricing announcement and ongoing semiconductor strength widen the AI infrastructure investable universe; the Bloomberg data clarifies that allocators willing to differentiate within Big Tech itself are now being rewarded. Nvidia’s four-day losing streak (down 8.4%) and the Bloomberg piece’s note that “its grip on the market may be slipping” sharpen the diversification case.

Looking forward

Nvidia’s 20 May report will be the next pivotal moment. The UK read-across for AI infrastructure procurement is direct: if hyperscalers’ homegrown chip programmes (Alphabet TPUs, Amazon Trainium, Apple silicon) continue to scale, alternative-to-Nvidia capacity becomes a viable procurement path for UK enterprises and public sector buyers — adding leverage to AI compute purchasing decisions that have been Nvidia-dominated for three years. As BNY’s Bob Savage put it: “We’re getting to the ‘not everyone is going to win in this space’ stage.”