Microsoft and Meta are the first of the major technology companies to report quarterly results this week, stepping into a market that is closely watching whether hefty investments in artificial intelligence can sustain growth. Investors are weighing whether the big bets made by those companies - and by their peers including Amazon and Alphabet - will translate into revenue or cost improvements in the near term.
Collectively, Microsoft, Meta, Amazon and Alphabet are forecast to raise their AI budgets by about 30% this year, taking total AI spending to more than $500 billion, an unprecedented level of investment that is intensifying scrutiny of the returns those expenditures will generate. Skepticism over the distribution of benefits and the pace at which commercial gains will arrive has already influenced stock performance, with Microsoft and Meta both falling more than 6% in the last three months of 2025 while Amazon recorded a modest 5.1% gain in the same period following its November agreement with OpenAI.
By contrast, Alphabet has enjoyed a strong rally, with shares climbing roughly 29% over the quarter after market reception to Google’s Gemini 3 model. That momentum was further supported by a deal in which Alphabet agreed to power Apple’s refreshed Siri, moves that investors say strengthen Google’s position given the company’s integrated search and device ecosystems.
"Alphabet has the upper hand in the AI race as investors recognize that proprietary ecosystems, such as Apple and Search in Google, are tough to penetrate," said David Wagner, head of equities at Aptus Capital Advisors.
Microsoft and Meta will report results on Wednesday, while Alphabet and Amazon are scheduled to disclose earnings next week. The coming reports will include cloud and advertising metrics that market participants view as key indicators of how deeply AI is being monetized.
Cloud growth expectations
Analysts expect continued strong growth in cloud revenue across the major providers, though at varying rates. LSEG data suggests Google Cloud revenue growth accelerated to about 35% in the October-December quarter, up from 33.5% in the prior quarter. Microsoft’s Azure is forecast to rise 38.8% in the same period, a step down from a 40% gain reported in the previous three months. Amazon Web Services is expected to show growth of about 21.1%, a modest increase from 20.2% earlier.
Despite the robust cloud expansion, questions remain about how quickly enterprises will convert AI experimentation into measurable business outcomes. A recent survey conducted by PwC of 4,454 chief executives found that more than half of respondents reported seeing neither revenue nor cost benefits from their AI investments so far, a datapoint investors have cited when assessing the risk that current activity could resemble an investment bubble rather than an immediate productivity boost.
Microsoft’s management has acknowledged such concerns publicly. Speaking at Davos, chief executive Satya Nadella said: "For this not to be a bubble by definition, it requires that the benefits of this are much more evenly spread." Morgan Stanley analysts have characterized sentiment toward Microsoft as facing "a wall of worry," driven by intensified competition for Azure and OpenAI, in which Microsoft holds a 27% stake.
Operationally, Microsoft has warned of AI capacity constraints that it expects to persist at least through June. Separately, a jump in memory chip prices has clouded the outlook for the PC market, a key part of Microsoft’s personal computing segment that includes Windows and Xbox. Overall, Microsoft’s revenue for the October-December quarter is projected to have increased around 15.3% to $80.27 billion, marking the slowest growth pace in three quarters.
Alphabet, Meta and Amazon under the microscope
Alphabet is poised to benefit from rapid AI integration into search as well as from a steady advertising market, with consensus estimates pointing to a 15.5% rise in revenue to $111.37 billion for the quarter. In October, Alphabet opened a new commercial avenue by agreeing to supply Anthropic, an AI company it backs, with its Tensor Processing Units. That deal, described as worth tens of billions of dollars, represents a shift from Alphabet’s prior practice of keeping those chips reserved for internal use.
Meta is expected to report revenue growth of about 20.6% to $58.35 billion, driven in part by AI enhancements to ad search and recommendation systems. However, the company’s substantial hiring of AI talent has increased costs and is anticipated to slow profit expansion to the weakest rate in roughly three years.
Amazon’s top line is forecast to rise about 12.5% for the quarter, a modest deceleration from the prior period as growth in its North America retail business softens. Amazon’s earlier tie-up with OpenAI in November helped alter perceptions of its AI positioning, contributing to the share gains noted in recent months.
Market implications and investor focus
The upcoming earnings calendar will be judged less on headline AI spending and more on how that spending influences product monetization, cloud capacity, advertising dynamics and cost structures. Investors will be watching revenue trajectories, margin trends and any commentary on AI-related capacity constraints or chip cost pressures. With billions being allocated to AI development and infrastructure across the sector, the next round of quarterly reports will be a critical checkpoint for firms and the market as a whole.
Key takeaways will include whether AI investments are starting to deliver scalable revenue growth and whether supply-side constraints or component cost increases are pressing on profit margins. The results could determine investor appetites for further aggressive capital allocation into AI over the coming year.