Overview
- Both companies released results after the market closed on Wednesday, with Microsoft reporting $92.3 billion in revenue and $36.6 billion in net income while Alphabet posted $127.6 billion in revenue and a roughly $26.2 billion profit.
- Microsoft’s cloud and AI business drove performance: Azure grew about 48 percent and the Microsoft Cloud brought roughly $63.9 billion, pushing the stock up about 3.5 to 4 percent after the print.
- Alphabet showed rapid cloud growth—Google Cloud topped $30.7 billion—but search-ad revenue rose only about 12 percent to $63.35 billion and the shares fell roughly 8 to 10 percent in after-hours trading.
- Investor concern centers on Alphabet’s rising AI capital spending, which lifted quarterly capex to about $51 billion, pushed free cash flow into a negative position of roughly $9 billion, and stoked fears of future write-downs and credit stress.
- The results illustrate a broader industry shift: firms must now finance massive data‑center and chip builds for AI while moving toward usage‑based pricing for models, a change that will reshape revenue mixes and influence bond markets, credit costs, and investor decisions.