The 2025 Q4 earnings season is in full swing, with major players like Microsoft and Alphabet delivering results. Both companies saw weak reactions post-earnings due to high CapEx spending on AI and cloud services. Microsoft’s adjusted EPS grew by 24% to $4.14, while sales hit $81.3 billion, with concerns over Azure growth. Alphabet also beat expectations, with adjusted EPS up 31% and Google Cloud revenue soaring by 48% to $17.7 billion. Both companies are heavily investing in AI and cloud infrastructure, with bullish earnings outlooks for the future.

Investors are closely watching Microsoft and Alphabet as they navigate the AI and cloud landscape, with both companies facing pressure post-earnings. Microsoft’s stock underperformance seems overdone, while Alphabet remains richly valued. However, rising earnings estimate revisions for both companies signal optimism for their future performance.

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Read more at Nasdaq: Alphabet and Microsoft: Billion Dollar AI Bettors