Microsoft, Alphabet, and Amazon Set to Report Earnings Amid Rising AI Investments

This week marks a critical moment for major tech companies as Microsoft, Alphabet, and Amazon prepare to unveil their quarterly earnings reports. Each of these firms has significantly increased its capital expenditures to bolster AI infrastructure, reflecting the growing importance of artificial intelligence in their business strategies.

Microsoft is set to report its earnings on October 28, covering the first quarter of its 2027 fiscal year. Analysts anticipate earnings per share (EPS) of $4.71, up from $4.13 a year earlier, with revenue expected to reach $90.63 billion. Notably, Microsoft has restated its Azure revenue line, which is projected to grow by 44% to 45% in constant currency.

Alphabet will follow later the same day, with analysts forecasting an EPS of $2.94 and revenue of $127.92 billion. Despite a strong performance in its previous quarter, where EPS exceeded expectations, the stock fell, reflecting investor concerns about search revenue growth and the absence of a formal consumer AI agent launch.

Amazon will close out the earnings week on October 29, with expectations of an EPS of $2.01 and revenue of $202.16 billion. Amazon's AWS segment has shown robust growth, with a 37% increase in sales during the last quarter, marking its fastest growth in years. However, the company has also raised its capital spending forecast significantly, which has raised questions among investors.

As these companies report, they face scrutiny not only for their earnings but also for their capital expenditures in AI. The tech sector's spending on AI is projected to reach $785 billion by 2026, indicating the high stakes involved in these earnings reports.