Big Tech Faces Growing Pressure to Justify AI Spending as Cloud Earnings Take Centre Stage

Josh Gilbert, Lead Analyst APAC and Middle East

Dubai, United Arab Emirates – October, 2025

Big Tech heads into a busy earnings week, but the market isn’t in the mood to give AI spending the benefit of the doubt. Meta beat on revenue last week and still sold off after lifting its spending plans again, and the damage quickly spread, with the Nasdaq 100 suffering its worst day since June. Amazon, Alphabet and Microsoft all dragged lower with it, leaving sentiment shaky and every dollar going into AI under the microscope, said Josh Gilbert, etoro Lead Analyst APAC and Middle East.

Wall Street expects Amazon, Alphabet and Microsoft to spend close to USD$580 billion between them this year and more than USD$800 billion in 2027. That’s well beyond the roughly USD$385 billion a year their three cloud businesses are bringing in, and with Amazon’s free cash flow in the red over the past 12 months, the money is going out faster than it’s coming back. The beauty of these three is that they can sell much of that computing power straight back out the door through their cloud businesses, which makes Azure, Google Cloud and AWS the first place investors will look for proof that the spending is paying off.

Google Cloud set the pace last quarter with growth of 82%, well ahead of Azure at 42% and AWS at 37%, so Alphabet faces the highest bar of the three, and with its shares sitting around 20% below their record high despite that growth, it also needs to show AI isn’t eating into the margins of its search business. Amazon needs to show its heavy spending is still lifting AWS growth after its fastest quarter in four years. Microsoft simply hasn’t had enough computing power to keep up with demand for Azure, which is a nice problem to have, and while it has already guided to Azure growth of 44 to 45% this quarter, its guidance for next quarter will show how quickly new capacity can turn that waiting list into revenue. 

Nobody expects spending to slow down, so this week comes down to whether cloud growth can keep pace. The hyperscalers that show money coming back in will quickly separate themselves from the rest of the AI trade.

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