Big Tech Earnings Spotlight AI Capex

Microsoft reported roughly $77.7 billion in revenue for the quarter but saw its stock fall after Azure outages and a record quarterly AI-related capex of about $34.9–35 billion, with management warning spending will rise and capacity constraints will persist into next year even as executives credited strong demand for Copilots and Azure AI. Alphabet beat expectations with about $102.3–102.4 billion in Q3 revenue and $2.87 EPS; Google Cloud revenue rose about 34% to $15.2 billion, the company cited a roughly $155 billion contract backlog and multiple >$1 billion deals, and it raised its AI capex outlook to about $92 billion, lifting its shares. The surge in AI-driven infrastructure spending across Big Tech has heightened investor concern about sustainability and capacity bottlenecks, though some founders and investors argue the boom is supported by real revenue and rapid enterprise adoption. Outside tech, Merck and Dollar General also reported stronger-than-expected quarters, underscoring pockets of resilience in the broader market.