Technology has been in the midst of a once-in-a-generation shift during the past few years. Cloud computing was already widely used, but got a boost from the growing adoption of artificial intelligence (AI). Because of the significant amount of data and the massive computing resources necessary, most AI systems live in the cloud. As demand for AI kicked into high gear, so too did demand for cloud computing. In the fourth quarter, worldwide cloud infrastructure services revenue of $119 billion grew 30% year over year, according to Synergy Research Group.
The clear beneficiaries of this trend have been the Big Three cloud providers, namely Amazon (AMZN 1.30%) Web Services (AWS), Microsoft (MSFT 0.36%) Azure, and Alphabet's (GOOGL 1.35%) (GOOG 1.30%) Google Cloud. The ongoing demand for cloud services has been a proxy for AI demand, and while each of the Big Three reported robust cloud growth in the 2025 calendar fourth quarter, one clear winner emerged.
Let's take a look at the results from each of these cloud titans and what they say about the future of AI.
Image source: Getty Images.
Amazon Web Services
As the largest cloud provider, all eyes were on Amazon when the company reported its recent financial results. AWS has long been the largest player in the cloud infrastructure industry it pioneered, and as such is seen as a bellwether in the space. It's no surprise, then, that it controls 28% of the worldwide cloud infrastructure market.
In the fourth quarter, cloud revenue of $35.6 billion grew 24% year over year, accelerating from 20% growth in the third quarter. CEO Andy Jassy noted that its growth rate was "our fastest growth in 13 quarters," fueled by strong demand for AI.
Amazon announced its spending plans for 2026, forecasting capital expenditures (capex) of $200 billion, with Jassy saying it was "predominantly in AWS." He said the company was supply constrained, noting, "We are monetizing capacity as fast as we can install it."
NASDAQ: AMZN
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Microsoft Azure
Microsoft Azure is the No. 2 cloud provider, controlling an estimated 21% of the worldwide cloud infrastructure market. The company took an early lead in the AI revolution, sparked by its investment in ChatGPT creator OpenAI. Microsoft was instrumental in kick-starting the AI boom by integrating generative AI across a wide range of its products and services.
During the company's fiscal 2026 second quarter (ended Dec. 31), Azure and other cloud services revenue increased 39% year over year and 38% in constant currency. While its growth rate was impressive, it ticked lower from 40% growth in Q1.
CFO Amy Hood previously said that in response to "accelerating demand and a growing remaining performance obligation (RPO) balance ... we now expect fiscal year 2026 [capex] growth rate to be higher than fiscal 2025," though Microsoft hasn't been more specific. For Q2, she confirmed "Our customer demand continues to exceed our supply," supporting the company's decision to boost capex spending.
NASDAQ: MSFT
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Google Cloud
Google is widely recognized as the smallest of the Big Three, controlling roughly 14% of the worldwide cloud infrastructure market. However, when Alphabet reported its fourth-quarter results, cloud was the star of the show. Google Cloud revenue of $17.7 billion grew 48% -- accelerating from 34% in Q3 -- and was the fastest growth rate among the Big Three. The company said the impressive growth was driven by demand for its AI.
Google's Gemini 3 AI model has been a big winner. Alphabet sold over 8 million Gemini Enterprise seats, while the Gemini app surpassed 750 million monthly active users. At the same time, CEO Sundar Pichai said, "We were able to lower Gemini serving unit costs by 78% over 2025 through model optimizations, efficiency, and utilization improvements." So not only is the company serving more users, but it has also lowered the costs of serving them.
To meet the demand, Alphabet announced 2026 capex spending in a range of $175 billion to $185 billion, primarily in servers and data centers to support AI and cloud growth.
NASDAQ: GOOGL
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Winner? Google Cloud!
To me, the clear winner was Google Cloud. Not only did the company's growth rate outpace both of its major cloud rivals, but it also cut costs, dropping more profits to the bottom line. While Amazon remains the largest of the Big Three, Google Cloud is growing more quickly.
Jassy threw a little shade at Google's results, saying, "It's very different having 24% year-over-year growth on a $142 billion annualized run rate than to have a higher percentage growth on a meaningfully smaller base, which is the case with our competitors."
While his point is well taken, if Google can continue to accelerate its cloud growth, it will eventually close the gap with its larger rival.
Alphabet isn't the screaming buy it was less than a year ago, but at 30 times earnings, it's attractively priced, particularly given the opportunity and its blistering cloud growth rate.
