MW Tech earnings are coming, and perhaps 'nothing looms larger' than this factor

By Britney Nguyen

OpenAI's actions are having a growing impact on Big Tech financials, driving up spending figures and boosting revenue - for now

OpenAI's need for computing power is expected to have an impact on Big Tech's capex forecasts, Melius analysts said on Monday.

OpenAI has been at the center of massive artificial-intelligence infrastructure deals in recent weeks, and with Big Tech companies slated to report third-quarter earnings later this month, some analysts expect to see higher spending forecasts as the competition hits a new gear.

Apart from the ongoing trade tensions between the U.S. and China, "nothing looms larger over" quarterly results "than OpenAI's spending ambitions," Melius analysts led by Ben Reitzes said in a Monday note. "The private AI colossus' appetite for compute should drive others to point to upside in capex spending forecasts," Reitzes said, naming Meta Platforms Inc. (META), Alphabet Inc.'s Google $(GOOGL)$ $(GOOG)$ and Microsoft Corp. $(MSFT)$.

OpenAI's momentum could help Microsoft, its investor and partner, deliver upbeat September-quarter revenue numbers, the analysts said. That's because of OpenAI's robust inferencing needs, which refers to the process of running AI models after training.

However, they said investors are worried that OpenAI will ditch Azure amid its partnership with Nvidia Corp. (NVDA) to deploy millions of the chip maker's graphics processing units. In Reitzes's view, the deal implies that OpenAI will have to "operate some of its own data centers," while its relationship with Microsoft remains unclear past 2030.

See more: Why Nvidia's $100 billion investment in OpenAI signals a major transformation

In the short term, things look rosier. Going into 2026, Microsoft's stock could outperform most of the group of megacap tech companies known as the Magnificent Seven, including Alphabet, Reitzes said, since the company is expected to have upside from OpenAI's use of Azure for inference workloads. While Microsoft's stock is only up 4% since July, the analysts see potential for a boost, "since Azure demand is strong, giving it pricing power for GPU instances, due to data center constraints across the industry."

To drive a sustained stock rally, the analysts said Microsoft has to show investors that it's seeing growing adoption of its Copilot AI assistant, which is necessary to keep the company competitive with ChatGPT and Google's Gemini. That could also convince Wall Street that Microsoft "is the 'interface for AI' as the platform of choice to create, run and deploy AI agents."

Meanwhile, Alphabet's stock has outperformed many of its Big Tech peers, partly due to "a growing perception that Search is stable," the analysts said. Google has been able to raise its cost-per-click prices, even as the amount of paid clicks remains flat. But OpenAI is changing the competitive landscape with its new Pulse offering that gives users personalized updates everyday, the analysts said, and that could push Google to change Search into "a push-like and predictive model" over time, which could be a negative for its advertising model.

"Luckily for [Alphabet's] stock, the Gemini AI App is increasing in popularity, YouTube is an AI winner, its Cloud business is on fire and Waymo represents an interesting call option," the analysts said.

Still, the analysts said search makes up most of Google's business, and the company isn't quite in the clear from mounting competition with AI-powered search engines, regardless of what management shares during its earnings report.

Other companies may not feel much of an impact yet from OpenAI's plans to spend more than $1 trillion on its buildout, the Melius team said, since most of that spending is expected to start in the second half of next year, therefore making third-quarter results "meaningless since the upside is on the come."

As an example, Reitzes said that Wall Street will likely be more focused on Advanced Micro Devices Inc.'s $(AMD)$ order sizes for its GPUs next year than on revenue results for its central processing units for personal computers. AMD announced earlier this month that it made a multiyear agreement with OpenAI to deploy six gigawatts' worth of its GPUs starting in the second half of next year to support the AI startup's data-center buildout. The deployment will start with AMD's Instinct MI450 series and Helios rack-scale AI systems.

See more: AMD's stock soars to its best day in a year. Here's why OpenAI wants a stake.

"OpenAI's quest for compute is compelling competitors to upside capex through 2027 and beyond - likely a positive for Nvidia as we hear from their customers during [calendar third-quarter] earnings," the Melius team said, adding that hyperscalers make up about half of Nvidia's revenue. "Those tied to OpenAI on the top line like [Microsoft] and [CoreWeave] could see bookings upside."

And although Oracle Corp. $(ORCL)$ doesn't report earnings for about two more months, the company has an analyst day this week and could provide more financials around its $300 billion infrastructure deal with OpenAI. Oracle's forecasts "could still astound," Reitzes said.

While investors will be paying attention to OpenAI's impact on revenue for partners such as Microsoft, CoreWeave Inc. (CRWV) and AMD, Reitzes said Arista Networks Inc. (ANET) stands to benefit over the long term from OpenAI's data-center buildout starting in 2027, as well as from demand for networking from Meta and Oracle.

-Britney Nguyen

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October 13, 2025 11:20 ET (15:20 GMT)

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