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Billions are moving through the AI supply chain. The question is which part of the stack is turning that investment into revenue.
Microsoft, Alphabet and Nvidia represent three different positions in the same chain.
Microsoft is the enterprise interface. It sells the tools businesses use to deploy artificial intelligence (AI), and Azure provides much of the cloud infrastructure that runs them. Alphabet is the vertically integrated competitor. It builds its own chips, operates its own cloud and monetises attention through advertising. And finally, Nvidia is the hardware foundation. It supplies the silicon behind many major AI workloads and is among the largest companies in the S&P 500 by index weight.
The Q2 2026 reporting season has become an earnings verification phase. In parts of the market, valuations have moved ahead of reported profit growth. Markets have priced the AI cycle as durable, leading some analysts to wonder if it is becoming a crowded trade. These results provide the next set of receipts.
Three questions running through the AI stack
Across Microsoft, Alphabet and Nvidia, markets are focused on three issues: whether investment is converting into revenue, whether margins can withstand higher infrastructure costs and what management signals about future demand. These questions run through each layer of the AI money trail, from cloud infrastructure and enterprise software to custom silicon and advanced chips.
Is AI spending generating revenue?
Hyperscalers have committed hundreds of billions of dollars in capital expenditure (capex). Traders want to see whether cloud growth and software adoption confirm that this spending is translating into commercial demand.
Can margins hold?
Infrastructure costs are rising. The question is whether gross margins are expanding, holding or compressing as AI workloads scale. The answer may shape how markets price future earnings.
What could guidance signal?
A headline beat can still be followed by a negative market reaction if guidance softens. Management commentary on the pace of AI adoption, backlog conversion and demand visibility may matter as much as the headline result.
For traders, the beat or miss may matter. The details may matter more. A strong result could still receive a cautious reaction if capex rises faster than revenue, margins compress or guidance implies a slower adoption curve than the market has priced in.
Alphabet Inc.
Expectations
Third-party consensus estimates for the quarter ended June 2026.
Global release
Times are estimates based on the expected earnings release time and may change.
Key trends affecting assets
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Google Cloud backlog conversion: Google Cloud’s contracted backlog exceeded US$460 billion in the prior quarter, while revenue grew 63% year on year (YoY). The focus is on how quickly that backlog converts into recognised revenue.
Watch: Cloud revenue growth and backlog conversion -
Search and YouTube advertising resilience: The bulk of Alphabet’s revenue remains tied to advertising. More than 30% of customers’ Search spending now uses AI-enabled campaigns such as Performance Max.
Watch: Search cost per click (CPC), impression growth and AI campaign adoption -
Capex and margin trajectory: Alphabet’s higher infrastructure investment may place pressure on free cash flow as the company expands its AI capacity. Markets want evidence that this spending produces measurable revenue.
Monitor: Free cash flow yield and the capex-to-revenue ratio -
US Department of Justice antitrust proceedings: The DOJ has secured remedies addressing search distribution and distribution agreements. Management commentary on implementation and potential additional relief may influence market pricing parameters.
Watch: DOJ developments and management commentary on remedies
EPS above US$2.88 | Cloud conversion accelerates
Google Cloud revenue grows materially above consensus expectations. Search advertising demand holds firm despite competition from AI-native search products, and Waymo provides an additional positive datapoint on commercialisation.
Possible reaction: The result could support Alphabet shares and broader tech sentiment.EPS between US$2.87 and US$2.88 | Cloud grows and advertising remains steady
Operational metrics land broadly in line with consensus. Cloud revenue tracks expected paths but doesn't accelerate. Search remains near prior trends while capex guidance is reiterated.
Possible reaction: Trading may remain relatively subdued, with attention shifting to Microsoft’s result.EPS below US$2.87 | Capex overshoots and advertising softens
Capex comes in materially above prior guidance, pressing free cash flow without corresponding expansion in revenue outlooks. Search pricing shows competitive pressure from AI-native alternatives.
Possible reaction: Alphabet shares could come under pressure as markets reassess economic returns.Track the macro trends shaking Wall Street.
Read our technical analysis on major banking infrastructures ahead of the reporting window.
From search and custom silicon to enterprise software
Alphabet owns search, advertising, cloud and the chips that support all three. Microsoft sits at the enterprise deployment layer. Alphabet’s result may test whether vertical integration remains an advantage. Microsoft’s result may test whether AI can be sold at scale across cloud infrastructure and workplace software.
Microsoft Corporation
Expectations
Third-party consensus estimates for the quarter ended June 2026.
Global release
Times are estimates based on the expected earnings release time and may change.
Key trends affecting assets
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Azure growth compared with capex: Microsoft expects Azure revenue growth of 39% to 40% in constant currency for the quarter, while investing approximately US$190 billion in capex during calendar year 2026. The focus is on whether this spending is translating into cloud revenue.
Watch: Azure constant-currency growth compared with the 39% to 40% guidance range -
Agentic AI and Copilot adoption: Following Microsoft Build 2026 and the introduction of Microsoft Scout, traders will scan the earnings call for evidence of commercial traction. Paid seat growth and ARPU will indicate whether enterprise adoption is expanding.
Watch: Copilot seat growth and ARPU -
Gross margin direction: Higher infrastructure costs associated with data centre expansion may place pressure on software-driven margins. Whether gross margin expands or contracts will be an important metric.
Monitor: Intelligent Cloud segment gross margin -
Regulatory backdrop: The FTC has examined partnerships between cloud providers and AI developers, including Microsoft and OpenAI. Management commentary on regulatory developments may affect longer-term growth assumptions.
Watch: Regulatory commentary affecting cloud and AI partnerships
EPS above US$4.28 | Azure accelerates
Azure constant-currency growth exceeds 42%, with enterprise Copilot seat growth producing measurable ARPU gains. Gross margin expands despite elevated capex, indicating infrastructure returns are outpacing consensus targets.
Possible reaction: The result may support broader tech sentiment if AI spending translates to cloud revenue at scale.EPS between US$4.24 and US$4.28 | Cloud remains steady and guidance holds
Azure grows in line with expectations, while Copilot adoption progresses without changing near-term structural metrics. Capex pathing is maintained with standard constructive corporate tracking.
Possible reaction: Trading may remain range-bound, shifting execution focus onto Nvidia later in August.EPS below US$4.24 | Capex runs ahead of revenue and margins soften
Azure growth decelerates materially while gross margin compresses under infrastructure operations outlays. Management raises spending outlooks without expanding the revenue frame.
Possible reaction: The result may place pressure on Nasdaq 100 sentiment given Microsoft's underlying weight profile.The season Wall Street cannot ignore.
Gain deep institutional macro perspective on structural market drivers this season.
Where cloud demand meets chip supply
Microsoft and Alphabet provide a view of demand across cloud infrastructure, enterprise software and AI services. Nvidia supplies much of the hardware supporting that demand, while major hyperscalers continue to develop their own alternatives in an intense AI chip war.
Nvidia’s update may help show whether spending across the software and cloud layers is continuing to flow into chip demand.
Nvidia Corporation
Expectations
Revenue guidance from management. EPS based on consensus data as at July 2026.
Global release
Release times are GO Markets estimates and may change.
Key trends affecting assets
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Blackwell and Vera Rubin supply constraints: Demand for Nvidia’s Blackwell architecture and the announced Vera Rubin platform remains a key focus. An important variable is advanced packaging capacity, including TSMC’s CoWoS process capacity crunch, which could limit the pace of the production ramp, even if underlying demand remains strong.
Watch: Blackwell supply growth and CoWoS packaging availability -
Gross margin sustainability: Nvidia delivered a generally accepted accounting principles (GAAP) gross margin of 74.9% in the prior quarter. Analysts will monitor whether pricing, product mix and production costs can sustain margins near this level as advanced architectures enter larger-scale production and hyperscalers expand their own custom silicon programs.
Watch: Data Centre gross margin compared with 74% -
Sovereign AI demand: Governments across Europe, the Middle East and Asia-Pacific are investing in domestic AI infrastructure. These customers may have different procurement priorities, project structures and implementation timelines from major hyperscalers. Growing sovereign AI orders could broaden Nvidia’s addressable market and reduce its reliance on a small group of large customers.
Watch: Sovereign and non-hyperscaler order visibility -
Custom silicon competition: Microsoft’s Maia platform, Alphabet’s Ironwood tensor processing unit, Amazon’s Trainium and Meta’s custom accelerators could reduce hyperscaler dependence on Nvidia hardware over time. The pace at which these alternatives affect graphics processing unit procurement remains a long-term variable. Management commentary on data centre demand, backlog and forward commitments may provide further evidence.
Monitor: Data centre demand and forward order commentary
Revenue above US$94 billion | Supply growth improves
Revenue comes in materially above Nvidia’s US$91 billion guided midpoint, suggesting that the Blackwell production ramp is progressing ahead of packaging constraints. Gross margin holds above 74%. Management provides early visibility on Vera Rubin orders. Sovereign AI is identified as a growing revenue contributor, potentially reducing customer concentration.
Possible reaction: The result could support Nasdaq 100 sentiment and reinforce expectations for continued AI infrastructure investment across the semiconductor sector.Revenue near US$91 billion | Supply remains on schedule and margins hold
Revenue lands at or near the guided midpoint. Gross margin remains close to 74%. The Blackwell ramp progresses without material supply disruption. Management reiterates demand visibility for the next two quarters without materially raising or reducing guidance.
Possible reaction: Trading may remain range-bound as markets wait for further evidence that the current revenue trajectory can continue into FY2028.Revenue below US$88 billion | Packaging constraints increase and margins soften
Revenue falls below the guided range, with management citing CoWoS packaging constraints or slower-than-expected Blackwell qualification among hyperscaler customers. Gross margin falls below 72%. Forward data centre revenue guidance is also reduced.
Possible reaction: Given Nvidia’s S&P 500 weighting, a material miss could cause an index-level reaction that extends beyond semiconductors and leads markets to reassess the wider AI hardware cycle.Explore the live earnings hub.
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Where the AI money is moving
The money is moving through three layers of the AI economy: chips, cloud infrastructure and enterprise software.
Nvidia is capturing spending at the hardware layer as companies invest in the processors and systems needed to build and run AI. Microsoft is capturing demand through Azure and paid AI tools such as Copilot. Alphabet is capturing it through Google Cloud, search and advertising products supported by AI.
Together, the three companies show how the AI boom is being monetised. Nvidia benefits from the infrastructure build-out, while Microsoft and Alphabet are positioned to convert that capacity into cloud, software and advertising revenue.
What the results may reveal
The AI boom is not being captured by one company or one part of the market. The money is moving from chips into cloud capacity, then into software, advertising and enterprise tools. Nvidia, Microsoft and Alphabet each sit at a different point in that flow.
Their results show which layer is capturing the most demand, whether that demand is becoming recurring revenue and where rising costs or slower adoption could begin to limit returns.
They also indicate whether spending remains concentrated in infrastructure or is beginning to produce broader, recurring revenue across the AI stack. That distinction could help show which companies are capturing the strongest commercial benefit and where the next pressure points may emerge.
Why headline beats may not be enough
Strong headline earnings may not tell the full story. The more important signal could be whether AI-related revenue is growing fast enough to offset rising capital expenditure, infrastructure costs and margin pressure.
A company may beat revenue or earnings expectations but still face a negative market reaction if guidance weakens or management cannot show a clearer path from AI investment to recurring revenue.
Reportingdates and release times are based on company investor relations calendars whereconfirmed. Where dates or times are not marked confirmed, they are GO Marketsestimates. Consensus EPS, revenue and analyst-range data are sourced fromBloomberg and Earnings Whispers, as at 09 July 2026 (AEST). Company guidance,backlog and operating metrics are sourced from the latest company filings orresults presentations, unless stated otherwise. Any scenario analysis reflectsGO Markets analysis. Figures and schedules may change without notice.
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