I've stopped judging this earnings season on beats and misses, because this week proved that test is broken. Alphabet grew revenue 25% to $127.6B and more than doubled its cloud business — and still got sold off 10.5% in premarket trading. Microsoft grew a slower 19% to $92.3B — and rose 3.5%. The difference wasn't growth at all. It was cash.
Microsoft's Azure grew 48% and, crucially, the quarter threw off $18.6B in free cash flow, well above the $8.5B analysts expected. Alphabet's cloud grew 103% to $30.7B, but its $51.4B capex bill pushed free cash flow to -$9.07B, with management warning spending rises significantly again in 2027. Reuters put it bluntly this morning: investors are no longer giving every hyperscaler a free pass to spend without limit. Meta falling 7% on its own first negative free cash flow since its IPO tells the same story.
That reframes tonight completely. Amazon reports after the US close, with consensus around $202.2B in revenue and $1.97 EPS, against its own $197-202B guidance — and AWS coming off 37% growth last quarter. A beat alone won't be enough now; the market will ask what it cost. If AWS keeps accelerating and the cash picture holds, Amazon confirms Microsoft's version of the story. If spending steals the print like it did at Alphabet, the whole AI trade gets another leg down.
So my question isn't whether Amazon beats — it's whether it can beat without burning cash to do it. Which version of this season do you believe: Microsoft's, or Alphabet's? #EarningsSeason $MSFTB $GOOGLB
Microsoft's Azure grew 48% and, crucially, the quarter threw off $18.6B in free cash flow, well above the $8.5B analysts expected. Alphabet's cloud grew 103% to $30.7B, but its $51.4B capex bill pushed free cash flow to -$9.07B, with management warning spending rises significantly again in 2027. Reuters put it bluntly this morning: investors are no longer giving every hyperscaler a free pass to spend without limit. Meta falling 7% on its own first negative free cash flow since its IPO tells the same story.
That reframes tonight completely. Amazon reports after the US close, with consensus around $202.2B in revenue and $1.97 EPS, against its own $197-202B guidance — and AWS coming off 37% growth last quarter. A beat alone won't be enough now; the market will ask what it cost. If AWS keeps accelerating and the cash picture holds, Amazon confirms Microsoft's version of the story. If spending steals the print like it did at Alphabet, the whole AI trade gets another leg down.
So my question isn't whether Amazon beats — it's whether it can beat without burning cash to do it. Which version of this season do you believe: Microsoft's, or Alphabet's? #EarningsSeason $MSFTB $GOOGLB
