Google and Microsoft face scrutiny over AI spending in pivotal earnings

Google and Microsoft are approaching earnings reports that investors view as important tests of the artificial-intelligence spending cycle. Technology stocks have rebounded ahead of those results, leaving expectations focused on how the hyperscalers are funding and monetizing AI infrastructure.

Alphabet reported fiscal 2025 revenue of $402.8B, up 15.1% year over year, while Microsoft reported fiscal 2026 revenue of $331.8B, up 17.8%. Those figures come from different fiscal year-ends and are not directly comparable, but they frame the scale of the businesses being asked to sustain heavy AI investment.

For Alphabet, the relevant link runs through advertising and cloud services: spending on computing capacity must support AI products without undermining the economics of its core search business. For Microsoft, the mechanism is tied to Azure and related applications and agents, where infrastructure spending is intended to support demand for AI services and software.

The immediate uncertainty is the balance between the cost of expanding capacity and evidence that customers are generating enough revenue to justify it. The market reaction has already moved ahead of the reports, so the coming results will provide the next dated evidence on spending, cloud growth and management commentary.

Alphabet reports on Oct. 29, followed by Microsoft on Oct. 29. Investors will have those disclosures to assess whether AI-related demand is scaling alongside the capital required to serve it.