Bernstein US Internet Mega 1Q26 Earnings: More Similar Than Different
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Bernstein reviews the first-quarter 2026 financial results of leading US internet platforms, concluding that the performance of Meta, Google, and Amazon shared more similarities than differences. All three technology giants exceeded market expectations across key metrics, driven by robust artificial intelligence investments, sustained advertising growth, and expanding cloud computing revenues. Specifically, Meta delivered a 22% year-over-year revenue increase to $45 billion, surpassing consensus estimates by 3%. Google advertising revenue grew 15% to reach $68 billion, bolstered by a 14% rise in search advertising. Amazon Web Services recorded a 19% revenue expansion to $28 billion, alongside a notable operating margin improvement to 32%. In a synchronized strategic shift, all three companies elevated their full-year 2026 capital expenditure guidance, primarily to fund expanding AI infrastructure requirements. Meta raised its capex outlook from $40 billion to $45 billion, Google increased guidance from $50 billion to $55 billion, and Amazon lifted its projection from $60 billion to $65 billion. The broader digital advertising market demonstrated considerable strength, achieving an 18% growth rate. Furthermore, Amazon's North American retail margins improved sequentially from 3% to 4.5%, while Meta's Reels advertising revenue achieved an impressive $10 billion annualized run rate. Bernstein maintains an Outperform rating on Meta, while sustaining Market-Perform ratings on both Alphabet and Amazon.
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