Meta and Microsoft are set to open the latest round of Big Tech earnings, with investors watching closely to see whether massive spending on AI is translating into durable growth. The scrutiny comes as Alphabet has recently gained momentum, reshaping expectations in an increasingly competitive AI landscape.
Together with Amazon, the companies are projected to boost spending on AI-related infrastructure and development by roughly 30% this year, pushing total outlays beyond $500 billion.
Over the past three months, shares of both companies have dropped more than 6%. Amazon’s stock edged higher by just over 5% during the same period, buoyed by a November agreement with OpenAI that reassured investors the company remains competitive in AI-driven cloud services.
Alphabet shares climbed nearly 30% over the same period, buoyed by strong feedback on Google’s Gemini 3 system and a recent agreement to support Apple’s redesigned Siri. Analysts say the company’s entrenched platforms give it an advantage that newcomers find difficult to challenge.
Meta and Microsoft released results on Wednesday, with Amazon and Alphabet scheduled to follow next week.
Concerns persist about whether AI adoption is delivering tangible benefits to customers. A recent PwC survey of more than 4,400 chief executives found that over half reported no meaningful cost savings or increase in revenue from AI investments so far.
Speaking in Davos, Microsoft chief executive Satya Nadella acknowledged that widespread value creation is essential to avoid the risk of a speculative bubble.
Analysts at Morgan Stanley recently described sentiment around Microsoft as increasingly cautious, citing heavier competition in cloud services and uncertainty around its stake in OpenAI. The company has also warned that limits on AI computing capacity could extend into midyear. Rising memory chip prices have further clouded prospects for the personal computing segment, which includes Xbox consoles and Windows.
Microsoft’s overall revenue is expected to have risen about 15% to $80.27 billion in the October to December period, marking its slowest growth. Alphabet, meanwhile, is projected to benefit from a steadier advertising environment and deeper AI integration, with revenue anticipated to climb more than 15% to $111.37 billion.
The Google parent also opened a new line of business last fall, supplying its in-house AI chips to Anthropic. The multibillion-dollar deal marked a shift from its previous policy of keeping the technology for internal use.
Meta is expected to report solid sales growth of over 20%, driven by AI-powered improvements in advertising tools, though heavy spending on elite engineering talent is likely to weigh on profits. Amazon’s revenue is forecast to grow at a slower pace of 12.5% as its core North American retail operation shows signs of cooling.
As most attention remains focused on those tech giants, other firms like D-Wave Quantum Inc. (NYSE: QBTS) are making progress in their bid to advance other verticals within the tech industry, and these advances could revolutionize many industries while setting the companies up for solid earnings growth in the years to come.
NOTE TO INVESTORS: The latest news and updates relating to D-Wave Quantum Inc. (NYSE: QBTS) are available in the company’s newsroom at https://ibn.fm/QBTS
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