Big Tech Earnings Week Will Ask Whether AI Spending Is Paying Off
Next week, U.S. markets receive the report cards of five giant technology companies in turn over five days. After the close on Wednesday the 28th, Alphabet and Microsoft go first, followed by Amazon and Intel on Thursday the 29th. On Monday, Nov. 2, Apple discloses its quarterly results last.
The Federal Reserve’s monetary policy decision also falls in the same week. The Fed meets for two days starting on the 27th and decides rates on the 28th, the very day big tech earnings begin. The estimates below are analysts’ forecasts, and actual results may differ.
The question put to the five companies is effectively one. Whether the astronomical sums being poured into artificial intelligence infrastructure are returning as revenue and profit. Meta’s earnings this week pulled that debate back to the surface, and markets have repeatedly confirmed a pattern in which shares fall when spending plans grow even if results are good.
Alphabet is representative. In its July second-quarter earnings, Alphabet’s Google Cloud revenue surged 82%, yet its shares fell 7.1% the next day because it raised its annual capital spending outlook to between $195 billion and $205 billion. Free cash flow turning negative was also a burden. What investors want to check this time is whether cloud growth continues and how far the company lays out spending for 2027.
MarketBeat reported that market expectations for Alphabet this quarter are revenue of about $127.5 billion and earnings per share of about $3. Search advertising grew 17% in the second quarter, and for the concern that AI answers will replace search to be put to rest, that growth must be maintained. Whether the cloud backlog keeps piling up is also expected to be checked.
Microsoft is seen at revenue of about $90.6 billion and earnings per share of $4.71, according to consensus estimates compiled by MarketBeat and Zacks. The point to watch is the growth rate of its cloud platform Azure, which Tickeron, which issued preview material, put at about 45%, faster than the previous quarter’s 43%. The market’s demand is that evidence appear in the Azure numbers that massive AI investment is leading to actual spending by corporate customers.
At Amazon, the guidance the company itself has given is the test. Amazon has forecast third-quarter revenue of $197 billion to $202 billion and operating income of $22.5 billion to $26.5 billion. Its cloud division AWS grew 37% in the second quarter, the fastest pace in 18 quarters, and Deutsche Bank raised its third-quarter AWS growth forecast to 41% ahead of the earnings release. But with Amazon having lifted this year’s capital spending plan to $220 billion, there are also warnings that if spending grows again, the growth narrative could wobble.
Intel’s issue is the foundry. Intel has given guidance of third-quarter revenue of $15.8 billion to $16.8 billion and non-GAAP earnings per share of $0.38, and MarketBeat’s compiled consensus is revenue of about $16.5 billion and earnings per share of $0.40. The foundry division posted revenue of $5.8 billion in the second quarter but recorded an operating loss of $2.1 billion. Whether the loss narrows further and whether there is progress in securing outside customers are seen as the watershed of the turnaround story.
Apple is of a different texture in this group. It is assessed to have been relatively less shaken in the recent tech stock sell-off because it has joined the giant AI infrastructure spending race comparatively less. MarketBeat reported expectations of revenue of about $113.4 billion and earnings per share of $1.99. Apple in July forecast revenue growth of 9% to 11% and a gross margin of around 47% to 48%.
Apple’s point to watch is the iPhone. This year the standard iPhone 18 was left out of the fall launch and only the Pro models came first, and with a Nikkei report that Apple cut component orders for the iPhone 18 Pro by more than 15%, questions about demand have grown. It is not a report Apple has confirmed. On the other hand, Counterpoint tallied that iPhone 18 Pro sales in China rose 23.5% from a year earlier in the first three weeks after launch, so Apple’s own numbers on Nov. 2 will sort out the conflicting signals.
The Fed variable cannot be left out either. With September consumer prices up 3.7%, hotter than expected, expectations of a hold next week dominate, but every expression in the decision statement and press conference could amplify or soften the market’s reaction to earnings. The five companies’ common message ultimately converges on one thing. Whether the market will accept, next week, evidence that revenue is catching up fast enough to justify the pace of AI spending.
