Key Highlights

● Microsoft and Alphabet report on October 28, and Amazon follows on October 29.

● Meta posted record revenue of $64.6 billion, yet shares had their worst day since July.

● Microsoft dropped $11.87 to $521.08, and Alphabet's Class C shares fell $10.19 to $320.76.

● The Federal Reserve announces its policy decision on October 28, alongside Microsoft and Alphabet results.

Meta Platforms (NASDAQ:META) set the bar on Thursday. Next week, three of the largest companies in the world must clear it.

Microsoft (NASDAQ:MSFT) and Alphabet (NASDAQ:GOOGL) report on Wednesday, October 28, and Amazon (NASDAQ:AMZN) follows on Thursday, October 29. All three fell on Thursday, October 22, as investors questioned the cost of the AI build-out.

Microsoft dropped $11.87 to $521.08. Alphabet's Class C shares fell $10.19 to $320.76. Amazon slid to $250.38 and was among the three worst performers in the Dow Jones Industrial Average. None had company-specific news. The Nasdaq Composite tumbled 694 points to 26,008.86, its steepest drop since June 5.

The Meta precedent

Meta's results show why the stakes are high. The company posted record revenue of $64.6 billion and strong guidance, yet its shares sank to their worst day since July. Free cash flow was negative at $2.12 billion, its first cash outflow in more than a decade according to reports, and spending commitments rose to about $825 billion.

Investors have made clear that revenue growth alone may not be enough. They want evidence that spending on chips, data centers and power will earn a return.

Questions on spending

The first test will be capital expenditure. Meta narrowed its 2026 range to $135 billion to $145 billion, and its shares fell as investors weighed the scale of its long-term commitments. Any sign that Microsoft, Alphabet or Amazon plan larger outlays without matching revenue could renew Thursday's selling.

IBM (NYSE:IBM) CEO Arvind Krishna added to the scrutiny, saying customers are "getting worried if some of the AI spending is completely out of control with no real return."

Questions on cash and financing

The second test is cash flow. Meta's free cash flow turned negative, and the cost of insuring its debt hit a record. Investors will look closely at how much cash the other giants generate after spending.

Nvidia (NASDAQ:NVDA)'s Jensen Huang raised the financing theme when he said "The demand of the capital is much greater than the availability of the capital." That remark referred to neocloud providers, but it sharpened attention on how the whole AI industry pays its bills.

Questions on cloud demand

The third test is demand. All three companies run large cloud businesses that sell computing power to other firms. Strong cloud revenue growth would suggest customers are still buying AI services at scale. Signs of slowing would support the worries Krishna described.

"Every index on the planet is basically an AI index," one fund manager said, a reminder that these reports could move the entire market.

The timing raises the stakes further. The Federal Reserve announces its policy decision on October 28, the same day as Microsoft and Alphabet. October 29 brings Amazon alongside third-quarter GDP and September PCE inflation data, plus results from Intel (NASDAQ:INTC) and Caterpillar (NYSE:CAT). ServiceNow (NYSE:NOW) also reports on October 28.

Early 2027 Guidance Could Decide the Trade

Beyond the headline numbers, investors will listen for commentary on 2027 spending plans, cloud backlog, financing and returns on AI investment. Meta's CFO Susan Li said the company is "quite early in developing our budget and capacity plans for next year," so any early guidance from its peers on next year's spending could prove decisive for the AI trade.