A $725 billion AI bill…

📊  Today’s Big Picture

The market got its answer.

48 hours ago, the question was whether the four largest cloud businesses on earth would back away from spending on AI.

They didn’t back away.

They went bigger.

Going into Wednesday night, Wall Street expected Alphabet (NASDAQ: GOOG), Meta (NASDAQ: META), Microsoft (NASDAQ: MSFT), and Amazon (NASDAQ: AMZN) to spend about $670 billion on AI in 2026.

The total was actually $725 billion.

An extra $55 billion - added in one evening.

Here’s the thing…

The real story isn’t the size of the number.

It’s that the market cheered it.

The S&P 500 (INDEX: SP500) closed above 7,200 for the first time in history Thursday.

April was the best month for stocks since November 2020.

Today: what this all means for the next six months…

[ MARKET SNAPSHOT DASHBOARD - Tatiana to design ]

Include: S&P 500 · Nasdaq · Dow · Bitcoin · Ether · Gold · WTI Oil · US 10-Year · DXY

🔍  Signal vs. Noise

The Verdict on the AI Trade

Wednesday afternoon delivered four corporate earnings reports back to back.

The contrast between them says everything about how the market is now judging AI.

Alphabet - Google’s parent - reported Cloud growth of 63%, more than 15 points above what Wall Street expected.

The stock jumped +9.97% Thursday. Six analysts raised their price targets overnight.

Microsoft beat on every line, raised its 2026 capex guide to roughly $190 billion, and was punished the next day with a −3.9% drop.

Meta raised its 2026 capex guide to $125–$145 billion and was punished even harder - down −6 to −9%.

Amazon delivered AWS growth of 28% - the fastest in 15 quarters - but disclosed that trailing free cash flow collapsed from $25.9 billion a year ago to just $1.2 billion.

Down −3% after-hours, then up +3% the next day.

The noise:

Whether one cloud business beat another’s growth rate by 50 basis points.

Whether Meta’s daily user count dipped or grew.

Whether Apple’s iPhone revenue was $56.99 billion or $57.99 billion.

The signal:

The market is no longer rewarding AI capex as a category.

It’s grading each capex dollar by how fast it converts into revenue.

Google’s Cloud backlog nearly doubled in 90 days, to $462 billion.

That’s why Google won the night.

Microsoft’s spending is up. Microsoft’s revenue conversion isn’t.

Meta is spending more on AI infrastructure than the entire GDP of Hungary.

That’s why Microsoft and Meta got punished.

📰  From Around the Market

Every issue, we bring you the most important stories from around the world and show you why they matter. Think of this as your shortcut through the noise - one click per story, and you’re caught up.

Powell just gave his last press conference as Fed Chair.

He held rates steady for the third consecutive meeting Wednesday afternoon.

The vote split was the most divided in nearly 34 years.

He confirmed something about his future at the Fed that almost no one expected - and named the specific reason why.

His replacement was approved by Senate committee that same morning. The handoff happens in 14 days.

Bill Ackman’s biggest IPO of the decade fell apart on day one.

Wednesday morning, the famous hedge fund manager rang the bell at the New York Stock Exchange.

His combined IPO had raised $5 billion - already half of what he originally pitched investors.

By the closing bell, the stock had crashed −18%.

What happened to the demand he spent two years building - and what it tells you about every other alternative-asset listing on the calendar.

Bitcoin couldn’t follow stocks to all-time highs.

Thursday, the S&P 500 closed at a record. The Dow jumped 790 points.

Bitcoin barely moved. And money kept leaving the spot Bitcoin ETFs for the fourth day in a row.

The pattern usually means one of two things - and a major report due next Wednesday will tell us which one.

One drug company just raised its full-year revenue forecast by billions.

Q1 revenue grew 56%.

Two drugs alone grew 125% and 80% YoY.

The stock jumped 7% Thursday - and the company raised its full-year revenue guide to a number that would put it on a trajectory most analysts thought it wouldn’t reach until 2027.

The drug behind the surge has become so widespread it’s reshaping how an entire sector of consumer goods is sold.

👀  What to Watch For

Tuesday May 5 AMC - AMD reports, Strategy reports

AMD (NASDAQ: AMD) is the cleanest read on whether the AI-chip story extends beyond Nvidia (NASDAQ: NVDA).

Its MI300 and MI325 accelerators are the only credible alternative to Nvidia GPUs in hyperscaler data centers, and the new MI350 ramps later this year.

Watch the data-center segment number - if it grows above 35%, the AI-spending story has another leg.

Strategy (NASDAQ: MSTR) - Michael Saylor’s Bitcoin (BTC) treasury company - also reports the same evening, with markets watching for any guidance change on the 818,334 BTC position and the corporate Bitcoin yield target.

Wednesday May 7 AMC - Coinbase reports

This is the most important crypto print of the year so far.

Robinhood (NASDAQ: HOOD) already told us last Tuesday that retail crypto trading was −47% year-over-year.

Coinbase’s (NASDAQ: COIN) expectations have been reset sharply downward in the last two weeks - its own Subscription & Services revenue guide of $550–$630M is 27% below what Wall Street had been expecting.

Watch the retail-versus-institutional trading mix, and watch the Base layer-2 on-chain revenue line.

Both will tell you whether crypto is in a cyclical pause or something deeper.

Thursday May 7 - Bank of England rate decision and Arm Holdings reports

The BoE goes first - markets are pricing roughly even odds of a cut, and any move would be the first rate cut by a major central bank in months.

Arm Holdings reports the same evening - the company licenses the chip architecture inside virtually every smartphone on earth, and now inside Nvidia’s Grace data-center processors.

Its outlook on AI inference demand will directly validate or challenge what we just heard from Microsoft and Amazon.

💭  Today’s Final Thought

This week, the market got the answer to a question it was asking for nearly two years.

The four largest cloud businesses on earth are spending $725 billion on AI in 2026.

That number is bigger than the entire annual GDP of Switzerland.

It exceeds the combined revenue of every airline on earth.

It’s almost double what the four spent in 2024.

And the stock market closed at an all-time high the day after they confirmed it.

You did not need to predict any of this.

You won’t need to predict the next round either.

Because the investors who do well over decades aren’t the ones who got Wednesday night right.

They’re the ones who structured their portfolios so Wednesday night couldn’t destroy them.

• So that no single Mag-7 capex headline can shake them.
• So that no single Bitcoin ETF outflow streak can rattle them.
• So that no single Powell press conference can change what they own next quarter.
• So that the only thing growing every week is what they actually own.

Loud weeks come and go. What you own on the other side of them is the only thing that compounds.

See you Monday.

- Rami Al-Sabeq (Editor in Chief | Future Finance)