It’s a bit of markets Monday, and let’s start with the earnings reports from last week.
Alphabet has increased its projected capital expenditures for the year to between $91 billion and $93 billion, driven by strong demand for artificial intelligence. The company reported quarterly revenue of $102.35 billion, surpassing analysts’ expectations of $99.89 billion, with a notable 34% growth in cloud revenue, which reached $15.16 billion. CEO Sundar Pichai emphasized the company’s commitment to investing in customer demand and seizing growth opportunities. Despite concerns about a potential AI bubble, Alphabet’s advertising revenue also rose by 12.6% to $74.18 billion, alleviating investor fears regarding the digital ad market’s stability amid economic uncertainties.
Amazon has reported a 20% increase in revenue for its cloud computing division, Amazon Web Services, despite a recent global outage that disrupted numerous services. The company exceeded Wall Street’s expectations, generating $33 billion in net sales for the third quarter, compared to an anticipated $32.42 billion. CEO Andy Jassy stated that AWS is experiencing its strongest growth since 2022, highlighting the resilience of its cloud services amid increasing competition from providers like Google Cloud and Microsoft Azure. Jassy clarified during the earnings call that layoffs of 14,000 corporate jobs were not financially or artificially driven, stating, “It’s culture,” and emphasizing the need for a leaner organizational structure to enhance decision-making and ownership among employees. In addition, AWS’s operating income rose to $11.4 billion, up from $10.4 billion year-over-year. The company continues to invest heavily in artificial intelligence and infrastructure, with total capital expenditures expected to reach $125 billion by the end of 2025.
Microsoft has reported a significant $49 billion in cloud revenue, despite facing capacity shortages that are expected to persist throughout fiscal 2026. During an earnings call, CEO Satya Nadella highlighted that Azure revenue grew by 40% year-over-year, indicating strong demand for its cloud services. In addition to the revenue figures, Microsoft reported that its artificial intelligence offerings have attracted approximately 900 million monthly active users, with the Copilot tools alone reaching 150 million users. Despite these successes, Microsoft’s Chief Financial Officer Amy Hood noted that the ongoing capacity constraints could have limited revenue potential. The company has invested nearly $35 billion in capital expenditures this quarter to enhance its infrastructure, but these efforts have not yet alleviated the supply issues affecting Azure services.
Microsoft’s latest earnings report indicates that OpenAI experienced a staggering net loss of $11.5 billion in the quarter ending September 30, 2025. This loss significantly impacted Microsoft’s financials, leading to a $3.1 billion decrease in net income and a reduction of $0.41 in diluted earnings per share. Microsoft, which has invested a total of $13 billion in OpenAI and holds a 27 percent stake, uses equity accounting to reflect its share of OpenAI’s losses directly in its financial statements.
Why do we care?
AI infrastructure spending is exploding. Google, Microsoft, Amazon, and Meta have all increased their capital investment plans, with total spending set to top $300 billion by the end of 2025. Much of that is going into data centers and GPU capacity to meet AI demand. Analysts warn that this level of debt-fueled expansion could create risks if AI doesn’t deliver expected returns — though the Federal Reserve points out that today’s firms are far more profitable than those in the dot-com era.
Meanwhile, other sectors are jumping in. A KPMG survey shows 67% of insurance CEOs expect AI returns within three years, up from just 20% last year. And telecoms are rapidly modernizing their networks, with public cloud use for network workloads projected to quadruple by 2030.
For MSPs, this environment means both opportunity and volatility. AI is driving infrastructure upgrades, but costs and capacity limits could ripple downstream. The winners will be the providers who can help clients evaluate where AI fits financially and operationally — not just technically.