Amazon, Alphabet Spend $420 Billion on Data Centers Amid Rapid Growth
Amazon and Alphabet are the two biggest spenders in the data center space. In 2026, Amazon projects spending about $220 billion, while Alphabet's guidance ranges from $195 billion to $205 billion.
The combined total of $420 billion could have been used for other purposes, such as paying investors a one-time dividend. For example, if Amazon and Alphabet paid out their projected capital expenditures, Amazon shareholders could have received $20.41 per share and Alphabet investors would have received $16.40 per share.
However, both companies are investing heavily in cloud computing due to high demand for rental capacity. Amazon's cloud computing platform, AWS, saw revenue growth accelerate to 37% year over year in the second quarter, while Google Cloud revenue climbed 82% year over year.
The rapid growth of these businesses justifies their investments, but it also means they're not cheap stocks. Using 2027 earnings projections, Amazon trades at a forward price-to-earnings ratio of 25 and Alphabet trades at a forward P/E of 23.