Markets await Microsoft, Alphabet AI revenue growth ahead of earnings

Semiconductor stocks led early gains, buoyed by reports of a sharp profit increase at SK Hynix, reinforcing confidence in AI-driven chip demand. However, rising oil prices added uncertainty, as higher energy costs could fuel inflation expectations and pressure growth stocks. The Fed is expected to hold rates steady, but Chair Kevin Warsh’s press conference may signal future policy shifts. Microsoft’s Azure cloud growth is projected at 45% year-over-year, while Alphabet’s Google Cloud faces a tougher comparison after 82% growth in the prior period. Both companies are expected to report capital spending of $195 billion to $205 billion for 2026, up from earlier estimates. Investors are divided: optimists believe AI revenue is scaling fast enough to justify spending, while skeptics question whether costs are outpacing returns.