Google Cloud Beats Both Azure and AWS, but Contracts Worth 462 Billion Are Forcing the Company to Spend More Than Ever…

Alphabet is currently experiencing its strongest growth phase in the last decade, and, paradoxically, it owes this to a business that many investors had written off just three years ago. Google Cloud grew 63 percent year-over-year in the first quarter of 2026 to more than $20 billion, clearly outpacing both of its major competitors: Microsoft Azure, with growth of around 40 percent, and Amazon AWS, with 28 percent. Even more important than the growth rate, however, is the contracted but not yet reported volume of orders—the so-called backlog—which nearly doubled quarter-over-quarter to roughly $462 billion. This is an order book unlike any other in the cloud sector.

This gives the investment thesis a clear outline, but also creates a clear tension. On the one hand, Alphabet has contracted demand that it cannot keep up with; according to management’s own statements, cloud revenue would be higher if the company had more computing capacity. On the other hand, that very capacity costs a…