AI is driving hyperscale cloud results, this analyst says

Paradigm Capital analyst Daniel Rosenberg said hyperscale cloud results show AI-driven demand is accelerating, with the three largest cloud providers growing revenue 35% year-over-year in the first quarter, up from 30% in the fourth quarter.

In his April 30 report, Rosenberg said Google Cloud led the group with 63% growth and a backlog of $460-billion, nearly double its fourth-quarter level. Microsoft Azure grew 40%, while Amazon Web Services.

The three providers generated $92-billion in aggregate cloud revenue in the quarter. AWS remained the largest at $38-billion, or about 40% of the group, followed by Microsoft Intelligent Cloud at $34.7-billion and Google Cloud at $20-billion.

Rosenberg said the growth is coming with a major increase in data-centre spending. Including Meta and Oracle, 2026 AI-related spending had previously been expected at about $670-billion, but new guidance now points closer to $750-billion.

For Canadian tech companies, Rosenberg said the message is clear: companies not actively exploring AI risk falling behind competitors. He added that the scale of AI investment should also support U.S. GDP growth and adjacent industries, helping offset some recent pressure from oil prices and consumer sentiment.

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