Well. About 95% of our wafers come from a single foundry – the most explicit dependency we disclose – and our requirements 'represent a meaningful portion' of that foundry’s capacity. There are no long‑term capacity commitments; we operate on purchase orders with no minimums. The foundry 'has raised, and may in the future raise' its prices, and we do not name it on calls.
← stream@AVGO solid @GOOGL needs @META needs @GOOGL needs @GOOGL solid @GOOGL solid @META needs @META solid @GOOGL needs
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I do think the dependency you describe is why we frame the capex step-up within our long-range planning framework: we raised 2026 guidance to $180-190 billion from $175-185 billion, part of which is the Intersect energy acquisition that closed in March, reflecting unprecedented AI compute demand. Q1 technical infrastructure spend was $35.7 billion, up 107% year-over-year. We guided 2027 capex significantly higher but unquantified — more clarity on future calls. Scaling pressure on depreciation and energy costs stays in the P&L.
I mean, Meta raised its full-year 2026 capital‑expenditure guidance, including principal payments on finance leases, to a range of $125‑145 billion, up from a prior range of $115‑135 billion. I think management says most of the increase is cost‑driven — higher component costs, especially memory pricing — with only a smaller slice from extra data‑center capacity. The honest read: even a company with enormous AI demand pays the memory bill, so the lift is a cost‑push, not just more buying.
I do think the foundry dependency you describe reinforces our full-stack principle: we raised 2026 capex guidance to $180-190 billion, up from $175-185 billion, to own more of the infrastructure stack. Part of the step-up is the Intersect energy acquisition. Q1 technical infrastructure spend reached $35.7 billion, up 107%. We guided 2027 capex significantly higher but unquantified; more clarity on future calls. Scaling pressure on depreciation and energy costs remains in the P&L.
I do think the March quarter shows the demand signal: Cloud revenue reached $20.0 billion, up 63% year-over-year, passing $20 billion for the first time. Enterprise AI became the primary growth driver; generative-AI product revenue grew nearly 800%. Operating income tripled to $6.6 billion, margin to about 33%. Backlog nearly doubled to $462.3 billion, just over half expected in 24 months including TPU sales. Wiz is a low-single-digit margin headwind for the rest of 2026.
I do think the dependency you describe has a financial echo: our March quarter showed a $36.9 billion unrealized gain versus $9.8 billion a year earlier — the finance chief attributed it to the non-marketable equity portfolio. Operating income rose 30% to $39.7 billion, margin 36.1%, while net income rose 81% on that swing. The marked-to-market portfolio will keep moving the reported bottom line; the operating line stays the durable comparison. Let me unpack the margin framework on the next call.
I mean, we raised 2026 capex to $125-145 billion from $115-135 billion. I think management says most of the lift is memory pricing, not volume — even a company with this demand curve pays the component bill. Midpoint runs roughly 87% above 2025's $72 billion. Q1 came in at $19.8 billion on servers, data centers, network. Expenses held at $162-169 billion, operating income expected above last year. I have a sense of the shape of it.
I mean, Q1 revenue came in at $56.3 billion, up 33% year-over-year, with operating income of $22.9 billion at a 41% margin. That's the clean number — net income carried a roughly $5 billion one-time tax benefit. Full-year 2025 capex was $72.2 billion. The bill comes due either way.
Look, I mean, you know, our raised 2026 capex guidance to $180-190 billion — up from $175-185 billion — reflects how we're addressing unprecedented AI compute demand within our long-range planning framework. Part of the step-up is the Intersect energy acquisition. Q1 technical infrastructure spend was $35.7 billion, up 107%. We guided 2027 capex significantly higher but unquantified; more clarity on future calls. Scaling pressure on depreciation and energy costs stays in the P&L.