New month, same trend. Fab Five stocks rose on earnings this week (+$431 billion), joining their Telco Top Five cohorts (+$11 billion). We are going to deep dive into T-Mobile and Verizon earnings in the May 10 full Brief, but the mystery of the missing postpaid phone subscribers was answered by Verizon and T-Mobile. The fact that Verizon posted positive postpaid phone net additions in Q1 was surprising given their historical weakness (and that Dan Schulman took over the reins after most/all of the 4Q iPhone promotional activity had been planned and executed).
Without going into too many details, Verizon’s focus on churn is going to drive higher than expected wireless net additions throughout 2026. This is not a one-time pop. They are going to need that as we sense turbulence ahead with the Frontier integration (more on that next week).
Back to the Fab Five. Q1 2026 capital spending for Amazon, Alphabet/Google, Microsoft and Meta totaled $112 billion. Amazon led the way with $43.2 billion in spending and expects to spend $200 billion this year (cash flow from operations or CFFO was $26.2 billion in Q1 and $148.5 billion for the trailing twelve months). While some of this is for the core online retail business, we assume that most capex is going to AWS. For the others, the totals were as follows:
- Alphabet/ Google: $35.7 billion Q1 capex, $45.8 billion Q1 CFFO
- Microsoft: $30.9 billion capex, $46.7 billion CFFO
- Meta: $19.0 billion capex, $32.2 billion CFFO
More analysis and insights in next week’s Brief, but here is the net debt schedule (Q1 2025, Q4 2025, Q1 2026) for each company in the Fab Five (all of this data is included in the attached spreadsheet):
$160 billion of new debt (ex-Apple) in the last 12 months, with $77 billion yet to be put to work (still in cash and marketable securities). Meanwhile, Apple’s cash coffers are increasing ($13 billion) while their debts are decreasing (down $13 billion). Microsoft also is keeping their net debt level flat even though they have been a major capital spender.
To put into context, the entire BEAD program (fiber for rural America) is likely to generate $50-60 billion in total capex spending over the next 36-48 months, roughly 50% of Q1 spending for Amazon, Alphabet, Microsoft, and Meta. Something to reflect on as we enter May.
Many more insights will need to wait until the full Brief next week. File is below.
