Key Highlights

● Microsoft beat estimates on revenue and earnings.

● Alphabet missed on both revenue and earnings.

● Azure growth accelerated and topped expectations.

● Alphabet's free cash flow turned negative.

Two of the biggest players in artificial intelligence reported results within minutes of each other, and investors delivered opposite verdicts. Microsoft rose in extended trading after its cloud business beat expectations, while Alphabet slid sharply after missing on earnings and revenue.

The split captured the central question hanging over the AI trade: which companies are turning their enormous investments into growth, and which are spending faster than the payoff arrives.

Microsoft's Azure Delivered

Microsoft reported revenue above analyst expectations, with earnings per share also topping forecasts. The standout was Azure, where growth accelerated and topped expectations, while capital spending came in below consensus, according to one market newsletter.

Separately, Microsoft reportedly offered voluntary buyouts to up to 60,000 employees, according to one report.

Alphabet Stumbled

Alphabet reported earnings well short of consensus estimates, with revenue also narrowly missing forecasts, marking the company's first miss on both lines in nearly four years, according to one market recap. Search revenue and YouTube advertising revenue both fell short, though Google Cloud was a bright spot, with revenue more than doubling.

But free cash flow turned negative, and Alphabet raised its 2026 capital spending forecast, with shares sliding sharply in extended trading as investors appeared focused on whether AI spending is producing returns.