Amazon, Microsoft and Alphabet report earnings as investors press for AI returns

Centre · 1Amazon, Microsoft and Alphabet are due to report quarterly earnings on Wednesday 28 October, and Wall Street expects faster growth in their cloud businesses. 1 Centre · 2A turbulent market selloff and concerns over the rising cost of financing AI are tempering optimism, and investors are pressing for evidence that the AI boom can deliver swift returns to justify its price tag. 1 2 Centre · 1CNA, citing rising bond yields at AI cloud providers such as CoreWeave and record costs to insure Meta's debt, said these have amplified concerns about how the AI infrastructure buildout is funded, particularly as higher US interest rates loom. 1

Centre · 1CNA says the three companies have nearly $1.7 trillion in combined backlog and plan to spend as much as $600 billion this year. 1 Centre · 2Meta's results last week are seen as a warning: better-than-expected revenue growth and an upbeat outlook were overshadowed by higher spending plans, and its shares fell nearly 7 per cent the next day. 1 2 Centre · 1According to LSEG data, Google Cloud revenue is expected to rise 95.1 per cent to $29.57 billion in the September quarter, up from 81.8 per cent growth the quarter before. Amazon Web Services is expected to grow 38.2 per cent, and Microsoft Azure 47.7 per cent, according to Visible Alpha data. 1

Centre · 1Alphabet and Amazon are expected to burn cash for the second and third consecutive quarters respectively, while Microsoft is likely to generate more than $8 billion in cash flow. Google search revenue growth is expected to slow to 14.7 per cent, with total revenue up 25.2 per cent to $128.18 billion. 1 Centre · 1Microsoft will report under a new structure for the first time, with a division called "Agents and Infra" and another called "Devices and Consumer", and will disclose Azure's quarterly revenue, which analysts expect to be $33.06 billion. 1 Centre · 1Bank of America strategist Savita Subramanian said investors would watch whether AI services income can justify rising costs, and noted that estimates for major cloud companies' 2027 capital spending have risen by nearly 90% since the start of 2026, as reported by Yahoo Finance. 2

Centre · 1Hindustan Times, citing Yahoo Finance, reports that businesses are becoming more careful with AI spending, choosing cheaper models and slowing spending on AI tokens, which suggests demand for computing power may not grow without limit. 2 Centre · 2Both outlets point to wider market stress: CNA mentions bubble warnings from Citadel's Ken Griffin, delayed IPOs and possible Democratic gains in the US midterms that could hurt data centres, while Hindustan Times notes planned listings by Anthropic (possibly November 2026) and OpenAI (possibly 2027). 1 2 Centre · 1The three companies' stocks have gained between 1.2 and 10.1 per cent this year, outperforming Meta but lagging the S&P 500's near 12 per cent rise, according to CNA. 1