Investing.com -- UBS maintained "buy" ratings on three major cloud providers as their combined revenue rose to $84.8 billion in the first quarter of 2026, up 39% from a year earlier, marking a 15-percentage-point acceleration from the growth rate recorded in the same period last year. The brokerage attributed the stronger performance to unprecedented demand for artificial intelligence-related computing capacity. Microsoft, Amazon and Oracle generated combined sequential revenue growth of $6.5 billion in the quarter, a 196% increase from a year earlier, UBS said in a research note.
The firms have now posted four consecutive quarters of historically elevated sequential gains.UBS expects combined sequential revenue additions to increase to $8.5 billion in the second quarter of 2026. Wall Street forecasts sequential revenue growth of between $8.1 billion and $9.8 billion for the group through the end of the year, according to the note. Google Cloud led the acceleration, posting 63% revenue growth to $20.03 billion in 1Q26, a 35-point acceleration since 1Q25, while AWS grew 28% to $37.59 billion, an 11-point acceleration over the same period.
Microsoft Azure held steady at 39% for four straight quarters as the company redirected capacity toward internal needs. The combined committed backlog of Amazon, Microsoft, Google, Oracle and CoreWeave reached $2.10 trillion at the end of 1Q26, up 184% year-over-year, with the five providers adding $400 billion to $450 billion in new backlog each of the last three quarters, according to company filings cited by UBS.Amazon’s backlog alone stood at $364 billion, of which $225 billion, or 62%, represented Trainium chip commitments, the note said.
Microsoft’s commercial backlog reached $627 billion, with 45% tied to OpenAI as of the December 2025 quarter. Google’s backlog surged $222 billion sequentially to $462 billion in 1Q26, driven in part by TPU chip sale agreements with external customers, a new revenue stream the company said it would begin recognizing later in 2026, with the majority converting to revenue in 2027. On margins, the combined operating margin for AWS, Microsoft’s Intelligent Cloud segment and Google Cloud held at 37% in 1Q26, unchanged from 4Q25, with AWS at 38% and Google Cloud expanding to 33% from 18% in 1Q25, the note showed.
Microsoft disclosed annualized AI revenues of $37 billion, up 123%, while Amazon reported AWS AI revenues exceeding $15 billion, up more than 100% year-over-year. Google cited 800% growth in enterprise AI revenues without providing an absolute figure.AWS Bedrock, Amazon’s AI development platform, reached 125,000 customers, covering 80% of the Fortune 100, with customer spend growing 170% quarter-over-quarter, Amazon said. "Bedrock is now a multi-billion dollar annualized run-rate business," Amazon said on its 4Q25 call.
Combined capex for the five providers is projected at $673.14 billion in 2026, up 76% from $382.66 billion in 2025, according to UBS estimates. Google indicated 2027 capex would "significantly increase" from 2026 levels.A UBS survey of approximately 140 enterprises found Microsoft Azure preferred by 69% of respondents for AI infrastructure, followed by AWS at 53% and Google Cloud at 27%, down from 31% in October 2025.
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