Big Tech Earnings Reports

The tech earnings season is in full swing, and two of the world’s biggest technology companies – Alphabet and Microsoft – have delivered standout results that beat Wall Street expectations. These Big Tech earnings reports highlight major milestones, including Alphabet’s first-ever $100 billion quarter and a resurgence in Microsoft’s cloud growth. Investors and industry watchers are parsing the numbers for clues about the broader tech economy, particularly the impact of cloud computing and artificial intelligence (AI) on these giants’ performance.

Source: Wikimedia Commons

Alphabet’s Blockbuster $100 Billion Quarter

Google parent Alphabet Inc. reported third-quarter revenue of $102.35 billion, topping estimates of about $99.9 billion. This marks the first time Alphabet’s revenue has crossed the $100 billion mark in a single quarter, a historic milestone for the company. The better-than-expected sales were fueled by a rebound in digital advertising and continued growth in Google Cloud, which saw revenue jump 34% year-over-year.

“We’re continuing to invest in AI and deliver helpful products that drive growth across Search, YouTube, and Cloud. This quarter’s results show strong progress in helping users and partners, and demonstrate our ability to execute at scale.”

— Sundar Pichai, CEO of Alphabet

Alphabet’s performance was broad-based, but a few segments stood out: YouTube advertising revenue came in at $10.26 billion, and Google Cloud revenue climbed to $15.15 billion. Notably, Google Cloud is now not only growing fast but has also achieved profitability in recent quarters, contributing positively to Alphabet’s overall operating income.

Another closely watched metric is Traffic Acquisition Costs (TAC) – the fees Google pays partners for driving traffic to its search engine. In Q3, TAC was $14.87 billion, roughly in line with expectations. Alphabet’s bottom line also impressed, with earnings of $2.87 per share (GAAP).

Alphabet Q3 2025 Results – By the Numbers

• Total Revenue: $102.35 billion (vs. ~$99.89 billion expected)
• Earnings (EPS): $2.87 per share (GAAP)
• YouTube Advertising: $10.26 billion (vs. ~$10.01B expected)
• Google Cloud Revenue: $15.15 billion (vs. ~$14.74B expected) – up ~34% year-over-year
• Traffic Acquisition Costs: $14.87 billion (vs. ~$14.82B expected)

In after-hours trading following the announcement, Alphabet shares jumped as investors cheered the revenue beat and strong growth in key areas like cloud and YouTube.

Microsoft’s Earnings Beat and Azure’s 40% Surge

Microsoft Corp. announced its fiscal first-quarter results, and the numbers easily topped Wall Street expectations. Revenue was $77.67 billion, and earnings came in at $4.13 per share (adjusted). The big headline, however, was the performance of Azure, Microsoft’s flagship cloud computing platform: Azure revenue jumped 40% compared to the year-ago quarter, a growth rate that markedly accelerated from previous quarters.

Source: Wikimedia Commons

The Intelligent Cloud segment – which includes Azure – was the standout, thanks in part to Microsoft’s leadership in offering AI-as-a-service through its Azure OpenAI partnership.

“We are witnessing a generational shift in the computing paradigm with AI, and Microsoft is leading the way. We're seeing record demand for our cloud services as customers embrace next-generation AI solutions.”

— Satya Nadella, CEO of Microsoft

Despite a strong top- and bottom-line beat, the company’s stock slipped about 1–2% in extended trading. This came as investors digested management’s guidance and concerns about rising capital expenditures to support its AI and cloud services.

Microsoft FY2026 Q1 Results – Key Highlights

• Revenue: $77.67 billion (vs. ~$75.33 billion expected)
• Earnings: $4.13 per share (adjusted, non-GAAP) vs. $3.67 expected
• Net Income: $27.7 billion (up from $24.67 billion year-ago)
• Azure Cloud Revenue Growth: +40% year-over-year

“Microsoft delivered a monster quarter, but expectations were so high that any less-than-perfect detail can spur a knee-jerk selloff. That said, the 40% Azure growth is a jaw-dropper – it speaks to the massive AI-driven cloud arms race in tech right now.”

— Dan Ives, tech analyst at Wedbush Securities

Cloud and AI Define the Quarter

A common theme between Alphabet and Microsoft’s results is the central role of cloud computing and artificial intelligence in driving growth.

• Alphabet has been infusing AI into its core offerings, from improving Search algorithms to adding generative AI features in Google Workspace. Google Cloud’s platform offers AI-powered solutions which are attracting customers and gaining traction against competitors.
• Microsoft has aggressively moved to integrate OpenAI’s GPT models into its offerings. The company’s Azure OpenAI Service is a key differentiator helping win cloud contracts, and new products like Microsoft 365 Copilot are set to create new revenue streams. The 40% growth in Azure suggests the surge in AI workloads is boosting consumption of Azure’s cloud services significantly.

Wall Street Reaction and Market Impact

Alphabet and Microsoft’s earnings set an optimistic tone for the tech sector. Alphabet’s better-than-expected ad revenues bode well for peers like Meta Platforms, while Microsoft’s strong cloud results are seen as a positive read-through for Amazon’s AWS. The overall message is that despite an uncertain macroeconomic environment, the biggest technology firms continue to deliver solid growth, powered by deep moats in cloud services and new opportunities in AI.

Looking Ahead

With Alphabet and Microsoft outperforming, attention will now turn to Amazon, Apple, and Meta. Investors are eager to see if Amazon’s e-commerce and cloud businesses echo the strength seen in Azure and Google Cloud, and whether Apple can reinvigorate growth. For now, the latest results suggest that Big Tech’s resilience is intact, with both companies at the forefront of major trends shaping the future of technology.

Frequently Asked Questions (FAQ): Big Tech Earnings

Q1: What led Alphabet’s quarterly revenue to exceed $100 billion for the first time?

A: Alphabet’s record-breaking $102.35 billion in Q3 revenue was driven by strength in Google’s core advertising business and significant growth in Google Cloud services. After a modest period last year, advertising revenues – particularly from YouTube – rebounded strongly. Additionally, Google Cloud’s revenue jumped 34% year-over-year as businesses and governments expanded their cloud and AI workloads with Google.

Q2: Why did Microsoft’s Azure revenue surge by 40%, and is this growth sustainable?

A: A 40% year-over-year jump in Azure revenue is largely attributed to overwhelming demand for AI and cloud computing services. Microsoft has positioned Azure as a leading platform for AI development by partnering with OpenAI, attracting many enterprises to choose Azure for their new AI workloads. While 40% growth is extraordinary, analysts believe a high growth trajectory for Azure can continue in the near term as the “AI arms race” among businesses fuels cloud usage.

Q3: If Microsoft’s results were so strong, why did its stock price slip after the earnings announcement?

A: Microsoft’s stock initially dipped about 1-2% in after-hours trading despite the company beating expectations. This can happen when investor expectations are extremely high. When a stock is priced for perfection, any aspect of the report that isn’t a home run (or any cautious commentary from management) can trigger profit-taking. In Microsoft’s case, some investors may have focused on the company’s cautious guidance or rising operating expenses.

Q4: What are Google’s Traffic Acquisition Costs (TAC), and why are they important in Alphabet’s earnings?

A: Traffic Acquisition Costs (TAC) are the fees that Google pays partners like Apple to make Google the default search engine or to carry Google ads. TAC is important because it’s a significant expense that affects Google’s profit margins. In Q3 2025, Google’s TAC was in line with expectations, suggesting Google isn’t having to sharply increase its payments to partners to maintain its search dominance—a positive sign.

Q5: How are Alphabet and Microsoft leveraging AI in their businesses, and did AI significantly impact this quarter’s results?

A: Both companies have emphasized Artificial Intelligence (AI) as core to their strategy.

• Alphabet (Google): AI is ingrained in Google’s products, boosting ad performance and driving Google Cloud's 34% growth through its AI offerings.
• Microsoft: The impact is more tangible. Microsoft is monetizing AI through products like Microsoft 365 Copilot. Crucially, the demand for AI workloads is a key catalyst for Azure’s 40% growth, as companies rent computing power from its cloud. This quarter underlined that the AI wave is boosting Big Tech’s top-line.

Q6: Where can I find the official earnings reports or filings for Alphabet’s and Microsoft’s results?

A: Both companies publish detailed financial results on their Investor Relations websites and file official reports with the SEC.

• Alphabet (Google): You can read Alphabet’s full Q3 2025 earnings press release on the Alphabet Investor Relations site.
• Microsoft: Microsoft’s earnings press release for Q1 FY2026 can be found on the Microsoft Investor Relations page.