软件行业：公有云与AI更新：一季度回顾，AI拐点已至

IndustryPublic Cloud & AI Update TMTSoftware Reflecting on C1Q Results: The AIInflection is Real Brad Zelnick C1Q results represented another step-function higher in nearly every metric wetrack and were well ahead of expectations. On the topline, aggregate revenue camein ~3% above consensus and growth accelerated ~6pts sequentially to +40% y/y@cc for the four largest US CSPs (AWS, Azure, Google Cloud, OCI), surpassing andon top of last quarter's impressive 4.5pt acceleration. Sequential revenue growth of$7.2bn was up >200% y/y and easily a C1Q record despite ongoing supplyconstraints across GPU & CPU capacity that at a minimum aren't easing andcontinue to put a ceiling on revenue in the near term. Research Analyst+1-212-250-8563 Benjamin Black, CFAResearch Analyst+1-212-250-9218 Bhavin Shah, CFAResearch Analyst+1-212-250-6775 Growth remains driven by a combination of AI and non-AI momentum, but it's clearthe AI-related share of the mix is rising rapidly. Incremental disclosures from mgmt.teams this quarter help shine a light on the magnitude of AI revenue, which we nowestimate accounts for a low-20s% of the overall mix for this group, up from ~10%a year ago. Although growing at a slower rate, non-AI services remain the largemajority of revenue and are also seeing healthy consumption trends, benefitingfrom strong core enterprise migration activity and increasingly a halo effect from AIprojects moving into production, both in terms of data readiness and ancillary cloudservices to support live deployments. Daniel Knauff Research Associate+1-415-262-2041 Yash Kejriwal Research Associate+1-212-250-1203 Looking forward, upwardly revised consensus numbers call for current growthrates to be sustained through 2026 and into CY27, and we'd argue the evidenceseems to support potential for even some further acceleration. Bookings continueto flow in, and we calculate backlog for the four CSPs rose to a staggering +183%y/y (from 153% prior). Substantial contracts with leading AI Labs have been a bigcontributor to this, but importantly, even stripping out these publicly-reportedmega deals (>$25bn) we estimate backlog is still up an impressive 70%+ y/y,supportive of growing diffusion. And on the supply side, the pace of capacity additions continues to quicken acrossphysical infrastructure deliveries and efficiency gains to squeeze more out of theseassets in a race to keep up with demand and demonstrate ROIC. This is beingsupported primarily through CapEx where estimates for the group in aggregatewere revised 8%/22% higher to ~$585bn/~$700bn for CY26/CY27, vs. ~$375bn inCY25 as well as lease obligations that combined now total near $1 trillion and to alesser extent rising R&D budgets. Together the pieces are there for rapid growth to continue and we anticipate the SoftwarePublic Cloud & AI Update main debates will further hone in around: (1) execution standing up capacity asplanned given myriad supply factors; (2) demonstrating attractive ROIC, which isstill more hotly debated as component prices spike, in the face of high initial scalingcosts; (3) the ability of end customers/IT budgets to absorb the costs of consumingthis infrastructure, and potential crowding out of other areas. Public Cloud Acceleration Continues C1Q public cloud results saw a remarkable further inflection despite ongoingsupply constraints that continue to put a ceiling on revenue in the near term.Revenue growth for the four largest US CSPs in aggregate surged another ~6ptssequentially to +40.0% y/y @cc on a similar comp, besting the ~4.5pts jump lastquarter (C4Q25). This was the fifth straight quarter of acceleration and highestgrowth rate since early-2022 when the revenue base was roughly a third the size. By CSP, Google Cloud once again stood out among strong results across the board,with its constant currency revenue growth rose to +60% y/y and matching lastquarters' considerable +14pt sequential jump. Albeit off a much smaller base, OCIsaw a similarly impressive leap (+81% y/y; +15pts sequentially) as capacitydeliveries to customers accelerated to >400MW in the quarter. Growth rates rosemore modestly for market leader AWS (+28%; +5pts), followed by Azure (+39%;+1pt). On a two-year stack, growth rates were also up ~3pts sequentially for thegroup, a seventh consecutive increase. Again, Google Cloud and OCI led the wayat +6pts vs. a more moderate +2pts for Azure and +1.5pts for AWS. This continues to be driven by a combination of AI and non-AI momentum, both ofwhich are reportedly capacity constrained. Non-AI services remain most of therevenue, benefiting from strong core enterprise migration activity and increasinglya halo effect from AI projects moving into production, both in terms of datareadiness and ancillary services to support live deployments. That said, the AI-related share of the mix is clearly rising rapidly and incremental disclosures thisquarter (see quotes section below) help frame the impact. Indeed, across this gr