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Microsoft and Alphabet Report Today: Azure, Google Cloud and the $50 Billion-a-Quarter AI Spending Test
- Microsoft (fiscal Q1 2027) and Alphabet (Q3 2026) report after the close on Wednesday, October 28, hours after the Fed decision.
- Microsoft consensus: about $90.6 billion revenue and $4.71–$4.73 adjusted EPS. Management guided Azure growth of 44%–45% in constant currency.
- Microsoft's capital spending is expected to top $50 billion for the quarter. Commercial remaining performance obligations were $678 billion last quarter, up 84%.
- Alphabet consensus: about $127.9 billion revenue, up about 25%. Google Cloud grew 82% to $24.8 billion last quarter.
- Alphabet guided 2026 capex of $195 billion to $205 billion. Last quarter's $44.9 billion capex pushed free cash flow negative.
Two giants, one afternoon
Microsoft and Alphabet both report after the bell on Wednesday, October 28. That's the same afternoon as the Federal Reserve decision at 2 p.m. ET (our preview), so expect a busy evening for markets.
These two companies are among the largest weights in the S&P 500. If you own an index fund, you own a lot of both.
What analysts expect
| Microsoft (fiscal Q1 2027) | Alphabet (Q3 2026) | |
|---|---|---|
| Revenue estimate | ~$90.6 billion | ~$127.9 billion (+~25%) |
| EPS estimate | ~$4.71–$4.73 | ~$2.94–$3.03 |
| Key cloud number | Azure guided +44%–45% (constant currency) | Google Cloud grew +82% to $24.8B last quarter |
| Capex | Expected >$50 billion for the quarter | $44.9 billion last quarter; $195B–$205B guided for 2026 |
Sources: FactSet-based estimates as reported by CoinCentral and FinanceFeeds; company guidance. Estimates vary by source.
The five numbers that matter
1. Azure growth. Microsoft guided 44%–45%. Hitting the top of the range would reassure investors that AI demand is still outrunning supply. A miss would raise questions about whether capacity is being built faster than it can be sold.
2. Google Cloud growth. An 82% jump last quarter set a very high bar. Investors want to see growth stay well above 50%.
3. Capital spending. Microsoft is expected to spend more than $50 billion in a single quarter. Alphabet's 2026 guide of $195–$205 billion is larger than the annual GDP of many countries. Any increase in guidance will move the stocks, in either direction.
4. Free cash flow. Alphabet's heavy spending pushed free cash flow negative last quarter. That's unusual for a company that has historically gushed cash. Investors will watch whether it turns positive again.
5. Backlog. Microsoft's commercial remaining performance obligations, contracts signed but not yet recognized as revenue, were $678 billion last quarter, up 84%. A growing backlog supports the case that spending will pay off.
The bigger question: is AI paying off?
This week is a stress test for the whole AI trade. Anthropic's IPO filing on Monday reignited enthusiasm (our report), and chip stocks rallied Tuesday. Now the companies writing the biggest checks have to show the revenue is following.
Our explainer on who actually gets paid from AI capex walks through where the money flows: chipmakers, power companies, construction, and eventually, the cloud providers themselves.
What it means for you
- Index investors: You don't need to do anything. But expect bigger-than-usual moves in the S&P 500 and Nasdaq on Thursday.
- Individual stock owners: Earnings-day moves of 5% to 10% are common for megacaps now. Decide in advance whether a drop would change your long-term view.
- Concentration check: If your portfolio is mostly US tech funds, these two reports, plus others this week, could move a big share of your wealth. See S&P 500 concentration risk.
What to watch next
- Thursday, October 29: PCE inflation data.
- Later this week: More Big Tech and AI-linked earnings reports, plus Exxon Mobil and Chevron.
Frequently asked questions
When do Microsoft and Alphabet report earnings in October 2026?
Both report after the US market close on Wednesday, October 28, 2026. Alphabet's conference call is scheduled for 4:30 p.m. ET, and Microsoft's call follows in the late afternoon. Check each company's investor relations page for exact times.
What are analysts expecting from Microsoft?
About $90.6 billion of revenue and adjusted earnings of roughly $4.71 to $4.73 per share for its fiscal first quarter of 2027, according to FactSet-based estimates. Microsoft guided Azure revenue growth of 44% to 45% in constant currency.
What are analysts expecting from Alphabet?
About $127.9 billion of revenue, up roughly 25% from a year earlier, with EPS estimates around $2.94 to $3.03 depending on the source. Investors will focus on whether Google Cloud can sustain growth after rising 82% last quarter.
Why does AI capital spending matter for investors?
Microsoft and Alphabet are each spending tens of billions of dollars a quarter on data centres and chips. If cloud revenue keeps growing fast, the spending looks justified. If growth slows while costs keep rising, profit margins and free cash flow shrink, and the stocks can fall.
How do Microsoft and Alphabet earnings affect my index fund?
Both are among the largest companies in the S&P 500 and Nasdaq-100. Big moves in either stock move the whole index, so even investors who only own broad index funds have a lot riding on these results.
Primary sources
- Microsoft Investor Relations — Earnings release schedule
- Alphabet Investor Relations
- FinanceFeeds — Microsoft earnings Oct 28: 45% Azure guide, $50B capex test
- CoinCentral — Microsoft and Alphabet earnings loom: can cloud growth hold?
- The Daily Upside — Alphabet and Microsoft earnings will put investors' AI stress to the test
Data & disclaimer: This article is for educational purposes only and is not financial or investment advice. Figures reflect data available as of Oct 28, 2026, and conditions change — always confirm current pricing, rates and rules with the provider before you act. Written by Elizabeta Dimoska. See our editorial standards and disclosure.
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