google, meta and microsoft Updates

Major technology companies, including Google (Alphabet), Meta, and Microsoft, are reporting record earnings, largely fueled by advancements and investments in artificial intelligence (AI). Alphabet achieved its first-ever quarter with over $100 billion in revenue, driven by AI integration in its search and cloud services, with Google Cloud revenue seeing a significant 33% increase. Meta's advertising business also saw strong performance, contributing to a 26% rise in third-quarter revenue to $51.2 billion. However, Meta's net income dropped significantly due to a one-time $15.9 billion tax charge. All three companies are substantially increasing their capital expenditures for AI infrastructure, with Meta planning between $70 billion and $72 billion for 2025 and higher for 2026, while Alphabet anticipates spending between $91 billion and $93 billion in 2025. Microsoft is also directing a large portion of its increased capital expenditures towards AI. Despite these strong financial results, concerns about a potential AI market bubble are emerging due to the massive spending. In related news, Intel is reportedly exploring the acquisition of AI chip startup SambaNova, which has raised over $1 billion and specializes in AI inference chips.

Key Takeaways

• Alphabet achieved its first quarterly revenue exceeding $100 billion, driven by AI and cloud growth.
• Meta's third-quarter revenue rose 26% to $51.2 billion, primarily from its advertising business, but net income fell 83% due to a $15.9 billion tax charge.
• Meta plans capital expenditures between $70 billion and $72 billion for 2025, with even higher spending expected in 2026, to build AI capacity.
• Alphabet anticipates capital expenditures between $91 billion and $93 billion in 2025, an increase from previous forecasts, to support AI development.
• Microsoft is also significantly increasing capital expenditures, with a substantial portion allocated to AI infrastructure.
• Collectively, Meta and Microsoft spent approximately $78 billion on capital expenditures last quarter, mainly for data centers and AI hardware.
• Concerns about a potential AI market bubble are growing among investors due to the high spending by Big Tech companies.
• Intel is reportedly in discussions to acquire AI chip startup SambaNova, which has raised over $1 billion.
• Google Cloud revenue increased by 33%, contributing to Alphabet's record earnings.
• Meta CEO Mark Zuckerberg defends aggressive AI spending, stating it's better to invest 'too much than too little.'

Google and Meta's AI Investments Boost Profits and Spending

Google and Meta announced strong third-quarter earnings, with AI driving significant revenue growth. Alphabet's revenue hit over $100 billion for the first time, and Google Cloud saw a 33% increase. Meta's advertising business also performed well, with AI tools generating over $60 billion. Both companies plan to substantially increase their spending on AI infrastructure in 2025 and 2026 to support future development, including Meta's goal of creating 'superintelligence'.

Meta Plans Higher Spending Amidst AI Race and Tax Charge

Meta's third-quarter revenue rose 26% to $51.2 billion, driven by its advertising business and AI improvements. However, the company reported a significant drop in net income due to a one-time $15.9 billion tax charge. Meta anticipates its capital expenditures for 2025 will be between $70 billion and $72 billion, with even higher spending expected in 2026. CEO Mark Zuckerberg emphasized the need to aggressively build AI capacity for future advancements, even if it risks overinvestment.

Big Tech Giants Boost AI Spending Amidst Record Earnings

Microsoft, Meta, and Google reported soaring revenues and announced significant increases in their spending on artificial intelligence infrastructure. Meta expects its capital expenditures to reach $70 billion to $72 billion in 2025, with higher spending projected for 2026. Alphabet anticipates spending between $91 billion and $93 billion in 2025, a rise from previous forecasts. Microsoft also increased its capital expenditures, with much of it directed towards AI infrastructure. Despite strong performance, concerns about a potential AI market bubble are emerging.

Meta's Revenue Soars, But AI Expenses and Tax Hit Concern Investors

Meta reported a 26% year-over-year increase in third-quarter revenue, reaching $51.2 billion, which surpassed estimates. However, the company also announced an 83% drop in net income due to a nearly $16 billion one-time tax charge. Meta raised its capital expenditures outlook for 2025 to between $70 billion and $72 billion, citing rising infrastructure and AI talent costs. The company expects total expenses to grow significantly faster in 2026 compared to 2025, leading to an 8% drop in Meta shares in after-hours trading.

Meta Stock Drops Amid Tax Charge and Aggressive AI Investment Plans

Meta Platforms reported a record third-quarter revenue of $51.2 billion, a 26% increase year-over-year, but its net income fell 83% due to a $15.93 billion one-time tax charge. The company also increased its projected expenses for 2025 and capital expenditures to between $70 billion and $72 billion. CEO Mark Zuckerberg stated that Meta's compute needs for AI are expanding, requiring aggressive investment in infrastructure. He believes investing heavily in AI is crucial, even if it means potential overspending, to capitalize on future opportunities.

Google Achieves Record Sales Over $100 Billion Fueled by AI

Alphabet, Google's parent company, announced its quarterly sales surpassed $100 billion for the first time, driven by its advertising, cloud, and AI initiatives. The company reported a net profit of $25 billion for the third quarter, with advertising revenue up 15% and Google Cloud revenue climbing 30% to $7 billion. CEO Sundar Pichai highlighted that investments in AI and cloud computing are driving innovation and growth, with new AI models and tools being integrated across Google's products.

Alphabet Hits $100 Billion Revenue Milestone Driven by AI

Alphabet announced a record-breaking third quarter in 2025, with revenues exceeding $100 billion for the first time. This achievement was largely driven by advancements in artificial intelligence (AI) and strong performance from Google Cloud. Executives highlighted how AI innovations are enhancing user experiences on platforms like Search and YouTube and are key to enterprise solutions offered through Google Cloud. The company's strategic focus on AI development is positioning it for continued growth in the technology sector.

Navan President Discusses AI, IPO, and Expense Management

Navan president Michael Sindicich discussed the company's strategy, focusing on artificial intelligence and customer choice to improve user experience and profit margins. Navan recently priced its initial public offering (IPO) at $25 per share. Sindicich also touched upon the timing of the IPO and the expansion of expense management services.

Alphabet's Strong Cash Flow Fuels AI Investments and Investor Confidence

Alphabet is generating substantial cash flow, enabling significant investments in artificial intelligence (AI) research and development. This financial strength is boosting investor confidence, especially as competitors face rising capital expenditures. Alphabet's ability to self-fund its AI ambitions provides a strategic advantage in the competitive tech landscape, allowing for long-term planning and innovation. This sustained cash flow differentiates Alphabet and supports its leadership in AI development.

Big Tech Earnings Show AI Spending Surge Amidst Bubble Fears

Microsoft, Alphabet, and Meta reported strong quarterly earnings, but concerns are growing about a potential bubble in the artificial intelligence market. Despite revenue increases, investors are focused on the mounting costs of AI infrastructure. Alphabet achieved its first $100 billion quarter, with AI enhancing its search and cloud businesses. Microsoft continues to see demand exceeding its capacity for cloud services. While these companies are investing heavily in AI for long-term leadership, the high spending raises questions about return on investment.

Meta and Microsoft Test Investor Patience With Massive AI Spending

Alphabet, Meta, and Microsoft collectively spent approximately $78 billion on capital expenditures last quarter, primarily on data centers and AI hardware. Meta and Microsoft shares experienced declines in after-hours trading following the disclosure of these significant expenditures in their quarterly reports. Investors are closely watching how these massive investments in AI infrastructure will translate into future returns.

Alphabet's Strong Q3 Earnings Driven by AI and Cloud Growth

Alphabet reported strong third-quarter earnings for 2025, with double-digit growth in its Cloud division and robust performance in digital advertising. The company's aggressive capital expenditures focused on AI and Cloud are driving operating income and free cash flow, which increased by 38.7% year-over-year. Alphabet is expected to benefit from a strong digital advertising market and continue its share buyback program. Analysts view Alphabet's shares as attractively valued, with potential for further gains as AI and Cloud growth accelerates.

Zuckerberg Defends Meta's Aggressive AI Spending Amidst Investor Scrutiny

Meta CEO Mark Zuckerberg defended the company's significant investments in artificial intelligence (AI), stating that it is better to invest 'too much than too little.' As Big Tech companies report their third-quarter earnings, investors are looking for evidence that massive AI and cloud investments from Meta, Apple, Microsoft, and Alphabet are driving substantial growth.

Intel Explores Acquiring AI Chip Startup SambaNova

Intel is reportedly in discussions to acquire AI chip startup SambaNova. SambaNova, founded in 2017, designs custom AI chips and has raised over $1 billion from investors. While the company previously achieved a $5 billion valuation in 2021, any potential deal with Intel might value SambaNova below that amount. SambaNova has focused on the inference space, developing systems that run already-trained AI models, offering its products through cloud services and on-premises solutions.

Sources

• AI is making Google and Meta even stronger and richer
• Meta Projects Increasing Expenses; Takes One-Time Tax Charge
• Meta, Google, and Microsoft Triple Down on AI Spending
• Fortune Tech: Capacity constrained
• 'We expect to invest aggressively': Meta stock tumbles as tax hit and AI spending spree rattle investors
• Google tops $100 billion quarterly sales as AI and cloud drive growth
• Alphabet Inc (GOOG) Q3 2025 Earnings Call Highlights: Record Revenue and AI-Driven Growth
• Navan's Michael Sindicich on AI and bringing your own bank
• Alphabet Gains Investor Confidence as Strong Cash Flow Funds AI Push
• Microsoft, Alphabet and Meta results overshadowed by growing fears of AI bubble
• Meta, Microsoft Test Investors’ Patience With AI Spending Spree
• Alphabet: Growth, Buybacks, Cheap P/E (NASDAQ:GOOG)
• Meta Doubles Down on A.I. Spending as Zuckerberg Defends New Investments
• Intel in Talks to Acquire AI Chip Startup SambaNova