Post by : Badri Ariffin

As the largest US technology companies prepare to unveil their quarterly results, market attention is focused on the role artificial intelligence is playing in their growth. Microsoft, Alphabet, Amazon and Meta are widely expected to post healthy revenue gains for July–September, driven in large part by AI-related demand.

Analysts warn that while AI promises major structural change over time, near-term measurable returns remain limited. The leading cloud providers are set to pour close to $400 billion into AI infrastructure this year alone, yet a recent MIT study found roughly 5% of corporate AI projects deliver clear, measurable benefits, with many efforts stalling at pilot stages.

“Models are improving, but tangible, widespread productivity gains are still scarce,” industry observers say as executives continue to invest heavily in developing and deploying AI systems.

The picture is further complicated by massive, interconnected agreements between AI developers and chip manufacturers. Reports suggest Nvidia may contemplate a $100 billion stake in OpenAI, while OpenAI has commitments to buy computing capacity valued in the hundreds of billions, raising questions about the long-term balance and sustainability among key partners.

Debt has become a more prominent part of the financing mix. Meta, for example, secured $27 billion from private lenders to support its largest data centre project, underscoring a shift toward greater borrowing to underwrite AI infrastructure.

Still, investors point to solid top-line momentum. Cloud revenue for Microsoft, Alphabet and Amazon is predicted to show double-digit year-on-year growth despite capacity constraints. Microsoft Azure stands out, with forecasts of 38.4% expansion, ahead of Google Cloud and Amazon Web Services. Quarterly revenue growth estimates are about 14.9% for Microsoft, 13.2% for Alphabet, 11.9% for Amazon and 21.7% for Meta.

Margins are expected to be under pressure, however, as rising expenses weigh on profitability. Most of these firms may record their weakest quarterly profit gains in more than two years, with Microsoft a notable exception.

The upcoming earnings releases will test how effectively these companies are turning AI investment into revenue and profit, and whether current valuations reflect durable progress or heightened risk.

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