PMVP

Fed held rates steady. After the close yesterday, Microsoft and Alphabet told two different market stories: Azure growth helped lift Microsoft, while negative free cash flow weighed on Alphabet despite a doubling in Google Cloud revenue.

The AI spending is real. The question is what shareholders get back—and the GDP and inflation reports add another test.

A Hold—Two Votes For A Hike

The Fed left its benchmark rate at 3.75%–4.00% in a 10–2 vote. Lisa Cook and Beth Hammack dissented, preferring a quarter-point increase.

The statement described economic activity as expanding at a strong pace while inflation remains elevated. That leaves a different message from a clean victory over inflation: officials held the rate, but the debate over tighter policy is still open.

The WOLF read: keep the decision and the outlook separate. An unchanged rate today does not settle the next meeting. Watch the inflation data alongside what companies say about demand and costs.

Sources: Federal Reserve statement

As expected …

Kevin Warsh and the 🇺🇸 Fed just left rates UNCHANGED at between 3.75%-4% pic.twitter.com/2YdhUjHUj7

— Evan (@StockMKTNewz) October 28, 2026

Microsoft—A $92 Billion Quarter. Azure Grows 48%.

Microsoft reported $92.3 billion in revenue for its fiscal first quarter, up 19% from a year earlier. Azure revenue grew 48%, while operating income rose 21% to $45.9 billion.

Adjusted earnings were $4.89 a share; GAAP earnings were $4.92. The adjustment excludes the impact of its OpenAI investments. Microsoft Cloud revenue reached $63.9 billion, up 30%.

After-hours check: Microsoft traded at $551.00, up 3.76%, at 5:16 p.m. ET. That is separate from its 0.06% decline during the regular session, before the results.

The WOLF read: demand is showing up in the income statement. The next question is how much capacity Microsoft needs to build to serve it, and what that leaves for cash flow. The earnings call matters as much as the headline growth rate.

Sources: Microsoft quarterly results

MICROSOFT $MSFT JUST REPORTED Q1 EARNINGS

– Revenue: $92.3B, beating expectations of $90.69B 🟢
– Adj EPS: $4.89, beating expectations of $4.73 🟢
– Oper Income: $45.9B (+21% YoY)
– Adj Net Income: $36.4B
– Azure: $33.2B (+48% YoY)
– Azure Growth ex-FX: +48%
– Azure Growth: +48%… pic.twitter.com/6QQBfiwXpY

— WOLF (@WOLF_Financial) October 28, 2026

Alphabet—Cloud Doubles. Cash Flow Bites.

Alphabet reported $127.6 billion in third-quarter revenue, up 25% from a year earlier. Google Cloud revenue grew 103% to $30.7 billion.

But quarterly free cash flow was negative $9.07 billion. At 5:32 p.m. ET, GOOGL traded at $288.71, down 11.14% after hours. Its 1.34% regular-session gain came before the earnings release.

The WOLF read: fast growth does not remove the bill for building it. The next reports need to show whether spending can translate into stronger cash generation.

Sources: Alphabet earnings release

GOOGLE CLOUD REVENUE MORE THAN DOUBLED LAST QUARTER

It brought in $30.7 billion, up 103% from $15.2 billion a year ago. Google $GOOGL called it record growth.

Cloud operating income more than tripled, from $3.6 billion to $11.1 billion.

"Google Cloud revenues grew 103%,… pic.twitter.com/XatLQA5Fkc

— WOLF (@WOLF_Financial) October 28, 2026

The Infrastructure—Vertiv’s Orders More Than Double

Vertiv reported $4.31 billion in third-quarter sales, up 61% from a year earlier. Organic sales grew 55%, and organic orders increased more than 100%. Adjusted earnings rose 78% to $2.21 a share.

The company also raised its full-year outlook. Its report gives a useful view of the physical infrastructure supporting data centers: power and cooling equipment still has to be ordered, built, delivered, and serviced.

The WOLF read: orders tell us about demand; sales and cash flow tell us about execution. Watch how quickly the new orders become completed projects, and whether margins hold as the business expands.

Sources: Vertiv quarterly results

VERTIV $VRT JUST REPORTED Q3 EARNINGS

– Revenue: $4.3B, beating expectations of $3.76B 🟢
– Adj EPS: $2.21, beating expectations of $1.83 🟢
– Adjusted Operating Margin: 25.2% (+290 bps YoY)
– Organic Orders Growth: 100%+

Q4 Guidance:
– Revenue: $4.3B-$4.5B, in line with… pic.twitter.com/N9xUMNcExk

— WOLF (@WOLF_Financial) October 28, 2026

Enterprise Software—ServiceNow Raises Its AI Target Again

ServiceNow raised its target for year-end AI annual contract value to $1.7 billion, up from $1 billion at the start of 2026. Third-quarter subscription revenue reached $3.988 billion, up 21% from a year earlier.

Annual contract value is a contract metric, not the same thing as recognized quarterly revenue. The higher target points to a bigger expected AI business, but it should not be added directly to the quarter’s revenue.

The WOLF read: the test for enterprise AI is whether customers keep paying after the initial rollout. Renewal rates, larger deployments, and measurable customer savings will tell us more than product announcements.

Sources: ServiceNow earnings filing

SERVICENOW $NOW JUST RAISED ITS AI TARGET FOR THE SECOND TIME THIS YEAR

It now expects $1.7 billion in AI annual contract value by the end of 2026, up from $1 billion at the start of the year. That's a 70% increase in its own target in just 10 months.

Customers are also using… pic.twitter.com/5OqtXKA7Ks

— WOLF (@WOLF_Financial) October 28, 2026

Oil & Inflation—The Other Big Bill

December WTI and Brent have risen 5.80% and 5.97%, respectively, over the five sessions from October 21–28, even though both are slightly lower week to date. Those are different comparison windows.

Renewed Yemen fighting and a Houthi-claimed attack on a Saudi refinery add to supply concerns. Saudi confirmation and the extent of any outage remain unverified. Higher oil prices put pressure on transport costs and margins just as investors turn to tomorrow’s inflation report.

Wolf Take:

The AI buildout is producing sales, infrastructure orders, and larger software contracts. Microsoft’s and Alphabet’s after-hours reactions show why that is only half the story. Watch the spending needed to deliver those revenues—and what remains after the bills are paid.

What To Watch Next.

Thursday, October 29 — Q3 advance GDP and September PCE inflation, alongside personal income, spending, and jobless claims. The briefing’s consensus is 3.2% annualized GDP growth and 0.3% monthly / 3.1% yearly core PCE. Estimates are not results.

Earnings: Lilly, Mastercard, and Caterpillar before Thursday’s open; Amazon and Intel after the close. On Friday, watch Exxon Mobil, Chevron, and AbbVie. Amazon’s AWS performance and the oil majors’ cash generation are two useful checks on tonight’s themes.

Friday, October 30: Employment Cost Index at 8:30 a.m. and Chicago PMI at 9:45 a.m. The Bank of Japan decision is also due overnight; its exact release time is unverified.

Monday, November 2: ISM manufacturing and construction spending at 10 a.m.; the Fed’s loan-officer survey at 2 p.m.; Treasury financing estimates at 3 p.m. Apple reports after the market closes, per the briefing. Monday’s times use EST following the November 1 clock change.

Disclosure: This content is for informational and educational purposes only and is not investment, tax, or legal advice.

Benzinga Disclaimer: This article is from an unpaid external contributor. It does not represent Benzinga’s reporting and has not been edited for content or accuracy.