Alphabet, Microsoft to Report Earnings After Wednesday's US Close; Wall Street Focuses on AI Spending and Cloud Monetization

Odaily: Alphabet (GOOGL.O) and Microsoft (MSFT.O) will release their latest quarterly earnings after the US market close on Wednesday. As major tech companies continue to expand their investments in AI infrastructure, investors are focusing on two key metrics: whether cloud business growth can continue to accelerate, and the extent to which rapidly swelling capital expenditures are eroding free cash flow.

Market expectations for the two companies have diverged significantly. Bloomberg data shows that since the previous earnings round in late July, Microsoft's stock has risen about 36% cumulatively, when Azure recorded its fastest growth in four years; Alphabet has fallen 6.3% over the same period, after the company sharply increased AI capital expenditures, causing free cash flow to turn negative. Wednesday's earnings will further test whether the two companies can demonstrate that AI investments are generating returns through cloud revenue growth.