Cloud boom at Microsoft and Google – but Alphabet's profit disappoints
Microsoft lifts net income by 32%, while Google's cloud revenue doubles. Alphabet, however, clearly misses profit expectations, and its shares fall around 10% after hours.
Archive image · Photo: Coolcaesar / Wikimedia Commons, CC BY-SA 4.0 (cropped and resized)
Two of the world's largest technology groups reported results on Wednesday evening that highlight the boom in artificial intelligence and cloud services. Microsoft grew revenue by 19% to $92.3 billion in the first quarter of its fiscal year (July to September), while net income rose 32% to $36.6 billion. Its Azure cloud platform grew 48%. The commercial order backlog rose 73% to $677 billion. The shares rose after hours.
At Google parent Alphabet, revenue rose 25% to $127.6 billion, and cloud revenue more than doubled to $30.7 billion (up 103%). Earnings per share, however, fell to $2.12 from $2.87 a year earlier; analysts had expected $3.02, according to Investing.com. The result was weighed down mainly by negative other income of $8.2 billion, which Investing.com says stemmed largely from an unrealised loss on its SpaceX stake. The shares lost around 10% after hours.
Spending is also a concern: Alphabet spent $51.4 billion in the quarter, mostly on data centres. Its 2026 guidance of $195 billion to $205 billion remains unchanged, but spending is set to "increase significantly" in 2027. CEO Sundar Pichai stressed that growth in search queries was the highest in five years. Amazon reports its quarterly results on Thursday.