Microsoft and Meta open the Big Tech earnings week under pressure to prove to investors that massive spending on artificial intelligence is translating into real growth, not just vision.
The focus is tougher this time because Alphabet’s recent surge has challenged long-held beliefs about first mover advantage.
Across Big Tech, spending plans are expanding at a rate the sector has never seen. Microsoft, Meta, Amazon and Alphabet are expected to raise their combined investment in AI by about 30% this year, pushing total outlay beyond $500 billion.
This explains the unease on Wall Street. Investors are no longer impressed by scale; they want results from these Big Tech earnings.
Microsoft, once viewed as the early winner after backing OpenAI, is now being questioned. Its shares and Meta’s have both fallen more than 6% over the past three months of 2025.
Amazon, helped by its November deal with OpenAI, edged up 5.1%, while Alphabet’s stock climbed nearly 29%, driven by strong feedback on Google’s Gemini 3 model and its deal to power Apple’s revamped Siri.
“Alphabet has the upper hand in the AI race as investors recognize that proprietary ecosystems, such as Apple and Search in Google, are tough to penetrate,” said David Wagner, head of equities at Aptus Capital Advisors. “Like in the internet boom, the first-mover advantage doesn’t always win the marathon.”
Microsoft and Meta will report their earnings on Wednesday, with other Big Tech companies like Alphabet and Amazon following next week.
Forecasts note Google Cloud growth picked up to about 35% in the last quarter of 2025, while Microsoft’s Azure is expected to slow slightly to 38.8%. Amazon Web Services is seen growing just over 21%, still modest by historical standards.
The concern is whether companies using this technology are actually seeing benefits. A recent PwC survey of 4,454 chief executives found that more than half reported no revenue gains or cost savings from their investments so far.
“For this not to be a bubble by definition, it requires that the benefits of this are much more evenly spread,” Microsoft chief executive Satya Nadella said at Davos.
Microsoft’s own challenges are increasing. Analysts at Morgan Stanley describe sentiment around the company as a “wall of worry,” noting stronger competition in cloud services and its reliance on OpenAI, where it holds a 27% stake.
The company has also warned that shortages in AI capacity will last until at least June, while high memory chip prices are weighing on the wider PC market, a key part of its Windows and Xbox business.
Revenue growth for the quarter is expected to slow to about 15.3%, the weakest in three quarters.
Alphabet, by contrast, is benefiting from tighter links between AI and its core search business, alongside a steadier advertising market. It is also opening new ground by supplying its Tensor Processing Units to Anthropic, a move worth tens of billions of dollars and a break from its long-standing policy of keeping those chips for internal use.
Stronger ad targeting and recommendations are expected to lift Meta’s revenue by more than 20%, but heavy spending on elite AI hires is set to drag profits to their lowest level in almost three years.
Meanwhile, growth in Amazon’s North American retail arm is slowing, but AWS is showing gradual improvement, helped by renewed confidence in its AI strategy.
