Big Tech earnings week is here—and this time, it’s not about margins, devices, or ad clicks.
It’s about artificial intelligence credibility.
As Microsoft (MSFT) and Meta (META) kick off earnings on Wednesday, they face mounting pressure to justify one of the largest spending sprees in corporate history. Together with Alphabet (GOOGL) and Amazon (AMZN), the group is expected to lift AI investment by 30% this year, pushing total spending beyond $500 billion.
That figure alone has investors uneasy.
The question hanging over markets is no longer who is investing the most—it’s who is actually winning.
From First Mover to Playing Catch-Up?
Microsoft once looked untouchable in AI.
Its early and aggressive investment in OpenAI gave it a perceived first-mover advantage, positioning Azure as the backbone of enterprise AI adoption. But that narrative is starting to fray.
Microsoft shares fell more than 6% in the final three months of 2025, as doubts grew over whether that early lead translated into durable dominance. Competition for cloud workloads has intensified, and Morgan Stanley now describes sentiment around Microsoft as a “wall of worry.”
Azure’s expected growth of 38.8% in the October–December quarter still looks strong—but it’s slower than the previous quarter’s 40%, a detail investors won’t ignore in an arms race defined by acceleration.
Adding to the strain:
AI capacity constraints are expected to last until at least June
Rising memory chip prices are pressuring the PC market
Windows and Xbox—key growth engines—face a tougher consumer backdrop
Microsoft’s revenue is expected to rise 15.3% to $80.27 billion, its slowest growth in three quarters.
First mover or not, markets are asking: is this lead slipping away?
Meta’s Superintelligence Gamble Comes Due
Meta is fighting a different battle—but one just as expensive.
The company’s push toward superintelligence and AI-driven advertising has required a massive hiring spree for elite AI talent. That investment is expected to boost revenue by 20.6% to $58.35 billion, driven by better ad search and recommendation systems.
But profits tell a harsher story.
Costs are rising faster than confidence, and profit growth is expected to slow to a near three-year low. Meta shares also dropped more than 6% late last year, reflecting skepticism that AI spending will translate into sustainable returns quickly enough.
For Meta, this earnings report isn’t just about numbers—it’s about patience. How long will investors tolerate spending before demanding payoff?
Alphabet Takes the Lead—and Investors Are Noticing
While Microsoft and Meta defend their strategies, Alphabet is quietly pulling ahead.
Shares surged around 29% over the last three months of 2025, fueled by strong reception to Google’s Gemini 3 model and a landmark deal to power Apple’s revamped Siri.
That momentum shows up in the numbers:
Revenue expected to jump 15.5% to $111.37 billion
Google Cloud growth likely accelerated to 35%, up from 33.5%
But Alphabet’s edge goes deeper than quarterly growth.
“Alphabet has the upper hand in the AI race as investors recognize that proprietary ecosystems—like Apple and Google Search—are extremely difficult to penetrate,” said David Wagner, head of equities at Aptus Capital Advisors.
In October, Alphabet also opened a new revenue stream by agreeing to supply Anthropic, an AI startup it backs, with its Tensor Processing Units (TPUs)—a deal worth tens of billions of dollars. It marked a strategic shift away from keeping those chips exclusively in-house.
In a race defined by scale and data, Alphabet is monetizing both.
Amazon: The Quiet Catch-Up Story
Amazon doesn’t report until next week, but expectations are already set.
Revenue is projected to rise 12.5%, slightly slower than the prior quarter as North America retail growth cools. Still, Amazon Web Services is expected to grow 21.1%, up from 20.2%, and its November OpenAI deal helped reposition AWS as no longer an AI laggard.
Amazon shares gained 5.1% in late 2025—not explosive, but steady in a market increasingly sensitive to execution.
The AI Bubble Question Won’t Go Away
Despite staggering investment, doubts about AI’s real-world payoff remain stubborn.
More than half of CEOs surveyed by PwC earlier this month said they have seen no revenue or cost benefits from AI investments so far.
That skepticism is fueling bubble fears that dominated much of last year’s tech narrative.
Microsoft CEO Satya Nadella addressed this directly at Davos:
“For this not to be a bubble by definition, it requires that the benefits of this are much more evenly spread.”
Translation: AI can’t just enrich hyperscalers—it has to work for everyone.
Earnings Week With Everything at Stake
Microsoft and Meta report on Wednesday. Alphabet and Amazon follow next week.
Together, these results will answer a critical question markets are desperate to resolve:
Is Big Tech building the foundation of the next economic era—or inflating the most expensive tech bet in history?
With half a trillion dollars on the line, patience is thinning—and the AI race just entered its most unforgiving phase.