Update — results are in (October 28, 2026). Alphabet and Microsoft have reported. Read the results: Google Cloud doubled and Azure hit 48% — the AI spending test passed on revenue.
Preview — expectations only. Neither company has reported yet. No results are claimed in this article.
Two of the biggest spenders in the AI buildout report after the market closes today, Wednesday, October 28, 2026. Alphabet reports third-quarter 2026 results with its earnings call at 4:30 p.m. ET, and Microsoft reports fiscal first-quarter 2027 results with its webcast at 5:30 p.m. ET. The Federal Reserve announces its rate decision earlier, at 2:00 p.m. ET.
The question tonight is not whether these companies spent heavily on AI infrastructure. They did, and the expectations below assume they did. The question is whether cloud revenue growth is keeping pace with that spending — because unlike pure AI spenders, Alphabet and Microsoft also sell computing power to other companies building AI products. Cloud revenue, not capex, is the test.
What is expected
Figures below are Wall Street expectations compiled from secondary previews published before the reports. Where sources disagree, both figures are shown and labelled. These are expectations, not results.
| Microsoft (fiscal Q1 2027) | Alphabet (Q3 2026) | |
|---|---|---|
| Revenue | $90.6 billion expected, up 16.7% year over year; the company's own guide was $89.85–90.95 billion | $127.9 billion expected, up about 25%; Alphabet gave no numeric revenue guide |
| Earnings per share | $4.71 expected, up 14% | $3.03 expected per one preview; $2.94 per the Zacks consensus — sources differ |
| Capital expenditure | $46.5 billion expected, up 140% from $19.3 billion a year earlier; separate tracker summaries report the company guided capex of over $50 billion for the quarter | $55.2 billion expected, up 130% from $23.9 billion a year earlier; full-year 2026 capex range $195–205 billion |
| Cloud | Azure growth guided at about 45% in constant currency; Intelligent Cloud revenue guided at $40.95–41.25 billion | Google Cloud projected at $29.15 billion, after 82% growth in the previous quarter; Alphabet gave no numeric Cloud guide |
What to watch
1. Cloud growth against the guides. Azure at roughly 45% constant-currency growth, and Google Cloud against the $29.15 billion projection and its 82% pace last quarter. Alphabet's finance chief has already flagged that renting third-party computing capacity would weigh modestly on Cloud margins this quarter — listen for how large that effect is.
2. Capex and backlog. Quarterly spending against the annual ranges, and any disclosure of contracted revenue backlog. Backlog is the other side of the capex story: it shows demand already sold, not just capacity built on faith.
3. AI monetisation. Whether Gemini and AI features in Search are producing revenue growth rather than only engagement, and whether Copilot adoption among enterprise customers is translating into Microsoft 365 revenue.
4. The Fed, as context only. The 2:00 p.m. ET decision and the 2:30 p.m. press conference set the tone for valuations and software budgets. This is an AI earnings story, not a Fed story — but a hawkish surprise would frame how the evening's numbers are received.
After the close
CloudEmythos will follow with a results article once the official releases and call remarks have been read. Any figure in this preview that the official releases contradict will be corrected explicitly there. Next up in the same test: Amazon reports after the close on Thursday, October 29, with previews expecting revenue of about $202 billion and earnings per share of about $1.96.
Sources
- Zacks earnings preview: Alphabet and Microsoft, AI cloud growth (October 27, 2026) — https://www.zacks.com/commentary/3016398/alphabet-microsoft-earnings-preview-ai-cloud-growth-takes-center-stage
- SentiSense, Big Tech earnings this week: Microsoft, Alphabet and Amazon — https://sentisense.ai/blog/big-tech-earnings-this-week/
- Robinhood Snacks daily email, October 28, 2026 (expectations summary).
This preview reports expectations from secondary sources. It is not investment advice. Official results will appear on Alphabet's and Microsoft's investor relations sites.
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