Key takeaways Alphabet delivered its first-ever $100 billion quarterly revenue, surging past analyst expectations with strong cloud and advertising growth. Microsoft's Azure cloud growth fell short of...
Tech's biggest earnings day of the year delivered a mixed bag of results on October 29, 2025, as Microsoft, Meta, and Alphabet reported third-quarter earnings that revealed the enormous costs and uneven returns of the artificial intelligence race.
Alphabet emerged as the clear winner of the day, with shares soaring more than 5% in after-hours trading.
The Google parent company reported revenue of $102.35 billion, up 16% year-over-year, marking its first quarter exceeding $100 billion.
"Alphabet had a terrific quarter, with double-digit growth across every major part of our business," CEO Sundar Pichai said in the earnings release. "We delivered our first-ever $100 billion quarter."
The company's cloud computing division proved particularly strong, with Google Cloud revenue reaching $15.15 billion, a 35% increase from the previous year.
Pichai noted the company signed more deals worth over one billion dollars through the first nine months of 2025 than it did in the previous two years combined.
YouTube advertising revenue grew 16% to $10.26 billion, while Google's core search and advertising business increased 15%.
The strong performance prompted Alphabet to raise its 2025 capital expenditure guidance to between $91 billion and $93 billion, up from $85 billion previously.
"We are investing to meet customer demand and capitalize on the growing opportunities across the company," Pichai stated.
Finance chief Anat Ashkenazi indicated spending would continue to climb, telling investors to expect "a significant increase in CapEx" in 2026.
Despite beating analyst estimates on both revenue and earnings, Microsoft shares dropped approximately 3% in extended trading as investors expressed disappointment with the company's cloud performance.
Microsoft reported revenue of $77.7 billion, up 18% year-over-year, with net income rising to match the strong top-line growth.
The company's Intelligent Cloud segment, which includes Azure, generated $26.75 billion in revenue, exceeding the consensus estimate of $26.16 billion.
However, Azure's growth rate failed to impress investors who have grown increasingly optimistic about AI-driven cloud demand.
Chief Financial Officer Amy Hood addressed the mixed results during the earnings call, noting improvements in some areas while acknowledging ongoing challenges.
The company's capital expenditures reached $34.9 billion for the quarter, a 74% increase from the same period last year.
Hood indicated that total spending would "increase sequentially, and we now expect the fiscal year 2026 growth rate to be higher than fiscal year 2025."
Meta Platforms reported the most dramatic results of the day, with shares plunging as much as 9% despite beating revenue expectations.
The company posted third-quarter revenue of $51.24 billion, up 26% year-over-year, but reported earnings per share of just $1.05 compared to analyst expectations of $6.72.
The massive earnings miss stemmed from what Meta described as a "one-time, non-cash income tax charge of $15.93 billion" resulting from the implementation of President Donald Trump's One Big Beautiful Bill Act. This caused net income to fall 83% year-over-year to $2.71 billion.
"We had a strong quarter for our business and our community," CEO Mark Zuckerberg said in the earnings release. "Meta Superintelligence Labs is off to a great start, and we continue to lead the industry in AI glasses."
The company reported 3.54 billion daily active users across its platforms, exceeding Wall Street expectations of 3.5 billion.
Advertising sales reached $50.08 billion, surpassing analyst estimates of $48.5 billion.
Meta raised its 2025 capital expenditure forecast to between $70 billion and $72 billion, up from its previous range of $66 billion to $72 billion.
CFO Susan Li warned that "capital expenditures dollar growth will be notably larger in 2026 than in 2025."
The earnings reports underscored the massive financial commitment tech giants are making to artificial intelligence infrastructure.
Combined, the three companies are spending well over $150 billion this year on data centers, chips, and AI capabilities.
Zuckerberg defended Meta's aggressive spending during the earnings call, describing it as necessary preparation for developing AI superintelligence.
"That suggests that being able to make a significantly larger investment here is very likely to be a profitable thing over some period," he stated.
The spending surge comes as companies race to capitalize on the AI boom, even as questions mount about when massive investments will translate into proportional returns.
Microsoft disclosed taking a $3.1 billion hit to net income this quarter from losses on its $13 billion investment in OpenAI.
Despite the enormous expenditures, executives from all three companies expressed confidence in their AI strategies and indicated spending would continue to accelerate through 2026.
The divergent market reactions to the earnings reports highlight investor uncertainty about which companies are best positioned to profit from their AI investments, even as the technology increasingly drives revenue growth across the industry.
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