May 12, 2026 - Angelo Zino, CFA, identifies two key catalysts fueling the recent AI trade rally: (1) Anthropic's explosive growth to $30 billion in annual recurring revenue and (2) accelerating cloud revenue across major providers. The Big Three cloud providers reported combined backlog of $1.45 trillion in Q1 2026, with particularly strong sequential growth at Google Cloud. All three providers showed revenue acceleration, with AI-specific products driving growth across platforms. Notably, investors appear to favor exposure to Anthropic over OpenAI, reflecting confidence in Anthropic's product traction.
Key Takeaways:
- Anthropic momentum: Significant portions of cloud backlog tied to the company’s commitments across providers
- Investment thesis: Zino favors all three cloud providers with nuanced distinctions – Amazon offers best risk/reward, Google has strongest fundamentals but premium valuation, Microsoft is cheapest but faces competitive concerns
- Infrastructure buildout: Combined 2026 capex guidance approaches $580 billion, primarily for AI infrastructure
- Near-term risks: Supply chain bottlenecks could constrain the broader AI ecosystem despite strong demand signal