Microsoft and Alphabet Earnings Today Put AI Spending to the Test

Two of the biggest names in technology report earnings today, hours after the Federal Reserve sets out its latest rate decision. Microsoft and Alphabet, the parent company of Google, publish quarterly results after the market closes on Wednesday, October 28, and Amazon follows after the close on Thursday, October 29.

The results land on the same afternoon as the Fed decision at 2 p.m. ET, so investors get the rate call first and the technology numbers second, with the reaction to both arriving together on Thursday morning.

The numbers analysts expect

For Microsoft, the consensus is earnings of $4.71 per share on revenue of about $90.6 billion. The company itself guided revenue to a range of $89.85 billion to $90.95 billion for the quarter. Its Azure cloud unit guided growth of about 45 percent in constant currency, and analysts surveyed by Reuters project Azure growth closer to 47.7 percent.

For Alphabet, analysts expect earnings of about $2.94 per share on revenue near $128 billion, up about 25 percent from a year earlier. Google Cloud is the number under the microscope: analysts expect its revenue to rise by about 95.1 percent from a year ago.

Amazon, reporting Thursday, is expected to post earnings of $1.96 per share.

Why spending matters more than sales this time

The three companies are in the middle of the largest building program in technology history. Alphabet has guided 2026 capital spending of $195 billion to $205 billion. Amazon plans about $220 billion. Microsoft's spending, including leases, could reach about $175 billion. Together the three could spend as much as $600 billion in 2026, most of it on data centers and the chips inside them.

Against that spending sits a combined cloud backlog of nearly $1.7 trillion in contracted work, reported by Reuters. The question analysts keep asking is a simple one: is cloud revenue growing fast enough to pay for the build-out, and how quickly?

The backdrop is a strong earnings season. Third quarter earnings for S and P 500 companies are tracking an increase of more than 32 percent, according to LSEG data cited in earnings previews, which sets a high bar for the technology names still to report.

What to watch tonight

Three things will move the stocks after the close: whether Azure and Google Cloud beat the growth rates above, whether either company raises its spending plans again, and what executives say about demand from business customers for AI services. A miss on cloud growth, paired with higher spending, is the combination traders fear most.