# AI cloud leaders are earning returns on rising capex

Markdown copy of https://realalpha.app/s/ai-cloud-leaders-are-earning-returns-on-rising-capex/ on Real Alpha, the best minutes from long interviews with the people building AI. Cite and link the page, not this copy.

- Speaker: [Gil Luria](https://realalpha.app/people/gil-luria/) · Head of Technology Research, D.A. Davidson
- Host: [Ed Elson](https://realalpha.app/people/ed-elson/)
- Show: Prof G Markets
- Episode: [Ray Dalio: The World Order Has Unraveled](https://realalpha.app/v/SLigyc-6qKY/), Apr 30, 2026
- Moment: 18:59 to 23:23 of the episode (4 min), playing on https://realalpha.app/s/ai-cloud-leaders-are-earning-returns-on-rising-capex/; the episode from there: https://realalpha.app/v/SLigyc-6qKY/?t=1139

## Quote

> “They're all managing this growth so well that they're accelerating growth with **higher margins**.”
> — [Gil Luria](https://realalpha.app/people/gil-luria/) at [19:34](https://realalpha.app/v/SLigyc-6qKY/?t=1174) · Prof G Markets

## Takeaways

1. Cloud growth is strong across businesses already generating substantial revenue.
2. Higher margins alongside faster growth suggest AI capex is paying off.
3. Meta’s spending is harder to justify without faster revenue growth.

## About this segment

Gil Luria says Microsoft, Amazon, and Google are growing their cloud businesses at higher margins, evidence that AI investment is paying off. He contrasts their returns with Meta’s rising capex without matching revenue acceleration.

From “Ray Dalio: The World Order Has Unraveled”, Apr 30, 2026. [Watch the full episode](https://realalpha.app/v/SLigyc-6qKY/)

## Transcript

Transcribed by machine (Whisper) from the episode’s audio, so a word may be off here and there.

[19:11](https://realalpha.app/v/SLigyc-6qKY/?t=1151) Oh, the curse of high expectations. Yes. Microsoft's growing a $100 billion business 40%. Amazon's growing $140 billion business 27%. And Google's growing an $80 billion business 63%. So incredible growth rates. And really important to point out, they're all doing it at higher margins than previously, which means that that concern that we had of, oh, the AI business isn't as good of a business, and because of all this investment and the depreciation, the margins won't be as good. No. They're all managing this growth so well that they're accelerating growth with higher margins. And this will go very importantly to this notion of return on investment, right? If these companies can accelerate growth at the same margin, that means they are getting a return on investment on AI. But to your point, Google is the one that's the star of the

[20:07](https://realalpha.app/v/SLigyc-6qKY/?t=1207) show today because they're doing so much better than anybody else, not just in Google Cloud. They're also still seeing acceleration in advertising revenue. Their search business accelerated to 19%. That's a massive business still accelerating. It's catching up to Meta. If Meta's growth in ads used to be twice as high as Google, now they're converging. and Google also started talking about selling its TPUs.

[20:31](https://realalpha.app/v/SLigyc-6qKY/?t=1231) This is something we started talking about a year ago as a wild idea. And now Google's actually doing it. So their chips are so good that they have demand for those chips. So Google's the star of the show. It's just making everybody else look not quite as good in comparison. I mean, it seems as though you have to just bet on these companies. Like, just to sort of take a step back, I mean when I think about all of the things that we were kind of worried about and we were worried about the AI build out and we were worried about the capex and are they going to see the ROI on their investments and it seems as though we're getting to the point where it's just like yeah the ROI is there these businesses are growing at absurd rates and you don't really have a choice like you have to bet on these companies and which sort of adds to my confusion a little bit

[21:24](https://realalpha.app/v/SLigyc-6qKY/?t=1284) in some of those after hours moves. And I wonder if that will probably change maybe during the day, maybe during the rest of the week. I mean, it's sort of... Simple question. I mean, how could you not bet on big tech at this point, at this stage in the game? No, that's exactly right. So let's first of all, just treat the three, Microsoft, Amazon, and Google as one category. Again, they're getting terrific returns on their CapEx.

[21:55](https://realalpha.app/v/SLigyc-6qKY/?t=1315) They're probably going to increase CapEx. Google has already said they will. And so that's one category. Meta's different. Meta doesn't actually sell its data center capacity. They're all using it for internal purposes. And part of what investors don't like about their report is that Meta's again increasing its capex without showing the corresponding acceleration in revenue. So they're increasing capex without acceleration in revenue, while Google, Microsoft, and Amazon have much a better case for why they're expanding their CapEx.

[22:30](https://realalpha.app/v/SLigyc-6qKY/?t=1350) But to your broader point, yes, the big techs are the ones that are capturing all the value. First and foremost, not reporting today, but the chip companies, NVIDIA, Broadcom, AMD, Intel, Micron, they're capturing a lot of the value. And then the big providers of AI compute, because Microsoft, Amazon, Google, They're the ones that provide everybody compute, not just open and anthropic, but any company that wants to do AI in-house is using capacity from one of those three one way or another.

[23:02](https://realalpha.app/v/SLigyc-6qKY/?t=1382) So, yes, the returns there are good. That's coming across clear. And today, again, expectations were super high for Microsoft and Amazon, and they didn't quite achieve them. For Meta, it's a little different.