3 Key Things to Monitor When Tech Giants Report Earnings

In the coming week, three major tech companies' earnings will be reported: Alphabet, Microsoft, and Amazon. Investors closely monitor these companies, as their performance can significantly impact the AI sector. If hyperscalers such as Alphabet and Microsoft continue to increase spending on AI, it will benefit chipmakers and neoclouds, who are essential players in the AI trade. This was confirmed by Elon Musk, who stated that SpaceX has been relentlessly hounding hyperscalers and AI enterprises for more compute.

Microsoft has demonstrated that its AI build-out is sustainable, projecting positive free cash flow in its fiscal 2027. Investors should closely examine the year-over-year growth rates for these tech giants to assess whether the increased capital expenditures will translate into positive returns. For example, Micron Technology has reported a 379% year-over-year revenue growth in its fiscal Q4 2026, benefiting from the soaring demand for its memory chips.

Alphabet's cloud revenue will be a key focus for investors, as it has been accelerating recently, including an 82% year-over-year growth rate in the second quarter. Amazon's Chief Executive Officer, Andy Jassy, reported that Amazon Web Services was booming in Q2, with a lot to be excited about. However, Amazon also reported a cash outflow of $7.6 billion for the trailing 12 months due to AI investments, down from $18.2 billion in positive free cash flow for the same period in 2025.

Investors should pay attention to operating income instead of net income, as it is less affected by large investments in SpaceX and Anthropic. Tech leaders' commentary will also reveal their views on the future of AI. For instance, Amazon's optimistic outlook for AWS may contribute to another stock market rally as investors become more confident in the financial viability of AI models and the businesses that utilize them.