Four of the world’s biggest tech companies Alphabet Inc., Microsoft, Meta Platforms and Amazon will report their results today, giving investors a big update on how they are performing. These companies have been investing huge on artificial intelligence (AI). Now, the big question is htat are they earning enough money to justify all that spending?
AI spending is high, expectations are higher
Over the past year, these tech giants have promised to spend hundreds of billions of dollars on AI. This includes building data centres, buying chips, and developing new tools.
Investors now want to see if this spending is actually leading to higher profits. If the numbers don’t match the spending, markets could react negatively.
Alphabet: Can search, cloud and subscriptions stay strong?
Alphabet comes into this earnings season with strong momentum. Its search business has been growing fast, and its cloud division has seen a big jump in revenue and profits. Subscriptions are also doing well.
The main question now is whether all three businesses can keep growing at the same pace. Investors will also closely watch how much the company plans to spend going forward.
“Going into Alphabet’s report, we think the firm’s stock is fairly valued. Google Cloud will be the star of the show. We expect breakneck growth in Google Cloud Platforms, powered by increased AI spending, enterprise adoption of Gemini, and growing TPU sales to large labs such as Anthropic. We will keep a keen eye on margins, as increased capital intensity from prior quarters will begin hitting the firm’s income statement via depreciation,” Malik Ahmed Khan, CFA told Morningstar
Khan further added, “we are also interested in what the firm’s updated 2026 capital expenditure forecast will look like. Given robust AI demand, we could see a modest uptick.
We expect search to remain resilient as AI continues to unlock new net monetizable queries while giving Alphabet more context, enabling better targeting.”
Meta: strong ads but rising costs
Meta’s advertising business continues to grow well, helped by AI tools that improve ads and targeting. However, the company is also sharply increasing its spending, especially on AI and its Reality Labs division. Investors will look at whether ad growth remains strong and whether rising costs start hurting profits. Updates on WhatsApp’s business and losses in Reality Labs will also be important.
Microsoft: AI growth versus capacity limits
Microsoft has been one of the biggest players in AI, but there are some concerns. Its cloud business, Azure, has been growing strongly but is facing capacity limits. At the same time, a large part of its future revenue is linked to OpenAI, raising questions about balance.
Investors will watch how fast Azure grows, whether demand beyond OpenAI remains strong, and how well products like Copilot are being adopted.
“Software stocks, including Microsoft, have lagged the broader market since July 2025, so we think shares are attractive.
We believe Azure has been generally strong but capacity-constrained. Management has been talking about the capacity issues fading away, but the timing keeps getting pushed out. Business has been booming because of AI,” Dan Romanoff, CPA told Morningstar.
Romanoff further added, “last quarter, Azure was ahead of guidance, but the March-quarter guidance was slightly shy. The big controversy was the company’s plan to dedicate some portion of Azure usage to internal demand. We’ll look for any commentary about remaining performance obligations after the surge from the OpenAI deal. We expect AI monetization to be an important consideration. The firm is making a big bet with capital expenditure, so any green shoots here are helpful. Last quarter, Microsoft said it had 15 million paying Copilot customers, which seemed disappointing. The new Claude Copilot may be able to drive adoption higher.”
Amazon’s strong growth strong
Amazon’s cloud business and advertising are growing well, which is a positive sign. But according to analysts, the company is spending heavily, and this has reduced its free cash flow. This means less cash left after expenses.
Investors will focus on whether cloud growth remains strong and whether cash flow improves. They will also watch if advertising and delivery services continue to support profits.
Disclaimer: This article provides factual analysis only and is not, and should not be construed as, an offer, solicitation, or recommendation to buy or sell securities. Investors must conduct their own independent due diligence and seek advice from a registered financial advisor in the respective jurisdiction.
