Alphabet, Amazon, Meta and Microsoft have signaled a staggering $650 billion budget for capital expenditures this year.
On Wednesday, the artificial-intelligence trade will approach a key checkpoint, just as Jerome Powell weighs in on a sticky inflation landscape while presiding over his last Federal Reserve policy meeting as chair of the U.S. central bank.
In a never-before-seen occurrence, Alphabet $(GOOG)$, Amazon.com (AMZN), Meta Platforms (META) and Microsoft $(MSFT)$ are all sharing their latest quarterly results on the same day, April 29.
Wednesday will be "one of the most significant earnings days in recent memory," Matt Stucky, chief portfolio manager at Northwestern Mutual, told MarketWatch. Alphabet, Amazon, Meta and Microsoft recently commanded a cumulative $11.6 billion in market capitalization, or over 19% of the entire S&P 500 SPX. Last quarter, these four companies revealed a combined $650 billion budget for capital expenditures in 2026, making them a key gauge of sentiment surrounding the AI trade.
Additionally, the Fed's Federal Open Market Committee (FOMC) will conclude its two-day meeting on Wednesday to determine the central bank's key interest rate. The outlook for inflation and employment remain uncertain as the war with Iran drags on.
After cutting rates in the back half of 2025, the Fed has since taken a pause, and more rate cuts seem further off as oil prices have spiked. Markets are pricing in a hold at the current 3.50% to 3.75% range.
Wednesday will also be Fed Chair Jerome Powell's last official press conference. Kevin Warsh, President Trump's pick to succeed Powell, is expected to be confirmed to the role by the U.S. Senate before the Fed's next policy meeting in mid-June. The biggest unknown is whether Powell will announce whether he will stay on the Fed board as a governor after his term as chair ends on May 15.
As geopolitical conflict intensifies, the closure of the Strait of Hormuz has direct implications for the AI trade, as disruption of global energy flows and other resources could impact data-center supply chains. In a note last week, Moody's analyst Terrence Dennehy highlighted that conflict in the Middle East poses a "supply risk" to the helium market.
"Helium is critical in several stages of semiconductor manufacturing - including cooling, use as a carrier gas and for leak detection - and there are no effective substitutes," Dennehy wrote.
Read: The top four takeaways from Trump Fed pick Kevin Warsh's confirmation hearing, according to strategist Tom Lee
It's highly unusual, but Big Tech companies have clustered their quarterly earnings reports around a single day in the past: Meta, Alphabet, Amazon and Apple $(AAPL)$ all reported earnings on the same day on Oct. 29, 2020, and on July 30, 2020, according to Dow Jones Market Data.
However, Wednesday's lineup bears additional weight, as investors look to see if the hyperscalers' massive AI investments are generating a return yet. As a result, there's potential for increased turbulence as markets digest new information.
"The setup going into earnings is pretty straightforward and consistent for the group at large," Bernstein analyst Mark Shmulik wrote in a note last week. The four hyperscalers will need to deliver AI-driven revenue beats, leave their capex budgets untouched and show cost efficiencies through head-count reductions or pricing power. Leading into earnings, Meta and Microsoft have already signaled increased cost efficiencies with layoffs and voluntary buyouts.
"The entirety of the AI complex right now is going to be supply constrained," Citizens analyst Andrew Boone told MarketWatch. He noted that there's not enough infrastructure and energy to satisfy appetite for compute; as a result, all four companies will need to show that they can bring data-center capacity online fast enough and fulfill their backlogs.
"Part of the question will be who is executing well enough to get capex into the ground," Boone said.
Demand for compute has risen rapidly thus far in 2026, Boone pointed out. Companies like Anthropic have signed a flurry of new deals to bolster their access to AI infrastructure. On Friday, Amazon also announced a deal to provide Meta with tens of millions of custom Graviton chips. Last week, Google announced at its Google Cloud Next conference that the company's models now process over 16 billion tokens, up from 10 billion a quarter ago.
As a result, Northwestern Mutual's Stucky is not ruling out the possibility of capex forecasts moving even higher, which could spark fresh concerns about AI overspending.
More: These stocks are popping after Amazon and Anthropic expand their chip partnership
Among the hyperscalers, the stakes are shaping up to be the highest for Microsoft, in Stucky's view. The stock has been relegated to the AI penalty box following last quarter's underwhelming Azure cloud growth and lackluster Copilot adoption. Shares of Microsoft are the biggest underperformer among the group, shedding 12% year to date. The stock has also been caught up in the sector-wide software selloff of recent months, and Stucky believes Microsoft's Copilot adoption trends will dictate the sentiment for software at large this earnings season.
For the March quarter, Wall Street is anticipating around 38% Azure growth, according to Guggenheim analyst John DiFucci. "The setup implies a steep increase in new business growth, which seems unlikely," DiFucci wrote in a note last week.
The AI leaderboard has been studded with swift rerankings as the technology rapidly evolves. Alphabet, Amazon and Meta were all deemed AI losers at some point last year, and this upcoming earnings season is likely to bring further shake-ups.
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