Amazon and Alphabet Set to Deploy $400B in AI Infrastructure This Year
Amazon and Alphabet are set to deploy nearly $400 billion in AI infrastructure this year. Amazon's cloud arm, AWS, grew revenue by 37% YoY, while Google Cloud surged 82% YoY. AWS' operating margin stood at 39.4%, with a backlog of $496 billion. Google Cloud's backlog was reported at $460B.
Search and YouTube cash-funded Alphabet's buildout, which has a forward P/E of 23. Amazon's free cash flow is negative $7.6B on a trailing basis. CEO Andy Jassy warned that data-center servers take nearly three years to break even, meaning most of the 2026 AI buildout won't fully monetize until 2028.
Alphabet trades at a forward P/E of 23 with a $428.16 analyst target. The company's vertically integrated stack is already earning its way through the buildout. In contrast, Amazon offers a wider AI menu and a fatter cloud backlog but has negative free cash flow.