OMM Newsroom
U.S. technology giants Alphabet and Microsoft have reported higher revenue for the latest quarter. Both companies’ results reflected strong demand for artificial intelligence and cloud services, but their profit figures moved in opposite directions, AnewZ reports.
Alphabet, Google’s parent company, generated $127.6 billion in revenue in the July-September quarter, up 25% from $102.3 billion in the same period a year earlier.
Despite record revenue, net profit fell to $26.2 billion, about 25% below the $34.98 billion reported in the third quarter of 2025. Earnings per share also declined to $2.12 from $2.87 a year earlier.
The company recorded negative free cash flow of $9.1 billion during the quarter. As competition in artificial intelligence intensifies, Alphabet continues to commit substantial funds to the field.
Alphabet CEO Sundar Pichai said investment in artificial intelligence was boosting activity across the company’s core businesses. AI had increased the use of Google Search, including business-related searches, and annual query growth had reached its fastest pace in five years, he said.
The company’s cloud division recorded its strongest growth. Google Cloud revenue rose 103% to $30.7 billion as demand increased for AI infrastructure and related services.
Pichai also highlighted the rapid adoption of the company’s AI products. The Gemini app has reached 1 billion users, making it the fastest-growing product in Google’s history, he said.
YouTube Music and YouTube Premium had more than 150 million subscribers worldwide, including users in trial periods. Pichai described this as creating significant growth opportunities for the company.
Microsoft revenue and profit beat forecasts
Microsoft also reported quarterly results that exceeded market expectations. The company counts the three months ended Sept. 30 as the first quarter of its 2027 fiscal year. Revenue for the period was $92.3 billion, up 19% from $77.7 billion in the same period a year earlier.
Net profit rose 32%, from $27.7 billion to $36.6 billion. Earnings per share increased to $4.92 from $3.72.
Microsoft spent $45.2 billion on capital expenditures during the quarter to expand data center capacity and AI infrastructure. CEO Satya Nadella said the company was helping customers build and operate AI systems while offering greater flexibility across its technology platforms.
“We are turning our innovation into increasingly high levels of adoption across sectors and tangible real-world impact,” Nadella said.
Cloud business was one of the main contributors to the company’s growth. Microsoft Chief Financial Officer Amy Hood said cloud revenue rose 30% to $63.9 billion during the quarter.
“We exceeded expectations across all three metrics: revenue, operating income and earnings per share,” Hood said.
AI intensifies competition in the technology sector
The results show the growing impact of artificial intelligence on competition among major technology companies. Alphabet and Microsoft have invested billions of dollars to expand AI capabilities, develop new products and build the computing infrastructure needed to support rapidly rising demand.
Although the two companies’ profits moved in different directions during the quarter, both reported strong demand for AI services and cloud computing. Alphabet increased revenue at a faster pace, but its profit declined; Microsoft combined revenue growth with higher profit. The difference reflects varying costs linked to the companies’ AI strategies and investment cycles.
