Microsoft vs Google earnings: why one stock rose and the other fell

Microsoft beat expectations and its stock rose about 4%, while Alphabet missed on profit and fell about 9%, even though Google Cloud doubled. Here's what happened, explained simply.

Chamith Shirantha

Oct 29, 2026 3 min read

Two of the world’s biggest tech companies reported their results on October 28, 2026, and investors reacted in opposite ways. Microsoft’s stock rose about 4% after hours, while Alphabet (Google’s parent company) fell about 9%.

Both companies are growing fast thanks to AI, so why the different reactions? Here’s a simple breakdown.

Microsoft: a clean beat

Revenue: $92.3 billion, up 19% (analysts expected about $90.7 billion)
Earnings per share: $4.89 adjusted (analysts expected $4.73)
Azure cloud: $33.2 billion, up 48%. It’s the first time Microsoft has given Azure’s exact revenue in dollars
Microsoft Cloud overall: $63.9 billion, up 30%
Copilot: Microsoft 365 Copilot users grew 50% from the previous quarter
Weak spot: Windows and devices sales fell, which Microsoft blamed on rising memory and storage prices

Most importantly, Microsoft’s forecast for next quarter was better than expected: revenue of $96–97.1 billion and Azure growth of 49–50%. CFO Amy Hood said, “We still have demand that exceeds supply.”

Alphabet: great cloud, disappointing profit

Revenue: $127.6 billion, up 25%, but slightly below the ~$127.9 billion expected
Earnings per share: $2.12, far below the ~$3.01 expected
Google Cloud: $30.7 billion, up 103%, its fastest growth ever
Search: up 12%, slowing from 17% last quarter
YouTube ads: up 9%, slowing from 13%
Gemini app: passed 1 billion users

Why Google’s stock fell

A big investment loss: Alphabet recorded an $8.7 billion loss on investments it holds in other companies, which cut profit per share by about $0.55. This is an accounting item, not a problem with Google’s core business, but it still made the headline number look bad.
Advertising missed: ad revenue was about $82 billion, below the ~$83.5 billion expected. Search and YouTube growth both slowed.
Huge spending: Alphabet spent $51.4 billion on capital projects (mostly AI data centers) in one quarter, more than double a year ago, and its free cash flow turned negative.

Investors loved Google Cloud’s growth, but they’re worried AI chatbots and agents could slowly eat into Google’s search advertising, its biggest money-maker.

What both results tell us about AI

AI demand is real: Azure (+48%) and Google Cloud (+103%) show businesses are paying for AI computing power at a huge rate.
AI is expensive: both companies are spending tens of billions of dollars a quarter on data centers and chips.
Your gadgets may cost more: AI data centers are using so much memory that PC and laptop prices are rising, which showed up in Microsoft’s falling Windows and device sales.

What’s next

Amazon reports on Thursday, October 29, after the US market closes. Investors will watch AWS cloud growth to see if the AI demand story continues. Read our preview: Big Tech earnings week: what to watch.

ByteTidings does not give financial advice.

Frequently asked questions

Did Microsoft beat earnings?

Yes. Microsoft beat expectations on both revenue ($92.3 billion) and earnings per share ($4.89 adjusted), and gave a stronger-than-expected forecast.

Why did Google stock drop after earnings?

Mainly because profit per share ($2.12) missed expectations due to an $8.7 billion investment loss, advertising revenue came in below forecasts, and search growth slowed.

How fast is Google Cloud growing?

Google Cloud revenue grew 103% to $30.7 billion, its fastest growth on record.

How fast is Azure growing?

Azure revenue grew 48% to $33.2 billion, and Microsoft expects 49–50% growth next quarter.

Sources

#Alphabet #Cloud computing #Earnings #Google #Microsoft

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