Big Tech faces earnings test after AI spending spree
Alphabet, Microsoft, and Amazon are set to report earnings over the next two weeks, with investors closely scrutinizing whether years of record AI investment are translating into stronger revenue growth. Analysts note that the market is no longer rewarding AI spending simply for its scale, but demands evidence of commercial returns. Google enters earnings in a strong position, with cloud and search driving AI monetization. Microsoft faces tougher questions as Azure growth lags rivals, while Amazon benefits from AWS's fastest growth in four years. Guidance is expected to be more important than headline earnings, as investors assess whether AI spending is becoming a sustainable earnings driver. Goldman Sachs forecasts AI-related businesses will account for the majority of S&P 500 earnings growth.
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Big Tech faces earnings test after AI spending spree
Alphabet, Microsoft, and Amazon are set to report earnings over the next two weeks, with investors closely scrutinizing whether years of record AI investment are translating into stronger revenue growth. Analysts note that the market is no longer rewarding AI spending simply for its scale, but demands evidence of commercial returns. Google enters earnings in a strong position, with cloud and search driving AI monetization. Microsoft faces tougher questions as Azure growth lags rivals, while Amazon benefits from AWS's fastest growth in four years. Guidance is expected to be more important than headline earnings, as investors assess whether AI spending is becoming a sustainable earnings driver. Goldman Sachs forecasts AI-related businesses will account for the majority of S&P 500 earnings growth.