“Terrific.”

That’s one word to describe the quarter Alphabet just had. Or at least that’s the word Sundar Pichai would, and did, use while editorializing around the numbers on Wednesday afternoon.

By first appearances, Pichai’s adjective works. Revenue last quarter clocked in at a show-stopping $102.35 billion, up 16% YoY and the first time total sales topped the $100 billion mark. Consensus expected $99.9 billion.

As the figure shows, the growth rate was the briskest since the March quarter of 2022. TAC was more or less in-line, at $14.87 billion.

Cloud sales jumped 34% to $15.2 billion, $500 million or so ahead of consensus. That’ll work. Operating income in Cloud rose 85%. YouTube ad revenue of $10.26 billion was up 15% from the same period a year ago, and also counted as a beat. EPS of $2.87 was up 35% and trounced the $2.35 estimate.

The focus for Alphabet, Amazon, Meta and Microsoft is obviously capex, and specifically AI spending. Alphabet said Wednesday the company now expects capex for 2025 to be between $91 billion and $93 billion. Last quarter, they tipped $85 billion. Management cited “growth across our business and demand from Cloud customers” for the increase, which should be music to the market’s ears.

Pichai lauded Alphabet’s Q3 performance across anything and everything to do with AI. Google Cloud ended the quarter with a $155 billion backlog, he said. “We are investing to meet customer demand and capitalize on the growing opportunities across the company.”

Meanwhile, over at Microsoft, revenue rose more than 18% YoY to $77.7 billion. That was ahead of estimates. Azure growth — which is the first number you check after the top-line result when you’re parsing a Microsoft quarter — was 39%, steady from the prior quarter’s YoY rate and better than expected.

I don’t know if those numbers will be “enough,” so to speak, given how the high the bar is, but there’s certainly nothing wrong with them.

As usual, the stock will trade on Amy Hood’s guide more than it will on last quarter’s results. Her assessment in the press release was about what you’d expect. Microsoft’s off to a “strong start” to their fiscal year, and whatever your expectations were, the company’s “exceeding” their own expectations for sales and profits.

Satya Nadella’s editorial was just a string of superlatives and AI jargon. “Our planet-scale cloud and AI factory is driving broad diffusion,” he said. (“The jaberflastun’s maxiproxal and the sistalflexure’s dandonfluster!”)

Microsoft, he went on, continues to increase investments in AI “across both capital and talent” because after all, “the opportunity ahead” is “massive.” Thank goodness for that. Because the spending’s “massive” too. Microsoft blew through almost $35 billion, up 46% QoQ.

And then there was Meta, where Mark Zuckerberg had a “small” tax issue. Specifically, the company’s effective tax rate last quarter was 87%.

Let me just say, before explaining what happened there, that even if that’s exorbitant for Mark’s company, it’s probably not for Mark himself. If there was any justice in the world (don’t worry, there’s not), someone worth $264 billion would be taxed at something like an 87% rate. If you’re inclined to call that insane, I’d gently encourage you to read a little history.

But Mark’s company probably shouldn’t be taxed at 87%, and it won’t be going forward. What happened was… well, I’ll let Meta explain it. To wit, from the 8K,

[T]he implementation [of the One Big Beautiful Bill Act] led to the recognition of a valuation allowance against our US federal deferred tax assets, reflecting the impact of the US Corporate Alternative Minimum Tax. As a result, the third quarter 2025 provision for income taxes includes a one-time, non-cash income tax charge of $15.93 billion.

Absent that, Meta’s tax rate would’ve been 14% in Q3, not 87%, its net income $18.64 billion not $2.71 billion and EPS $7.25 not $1.05. Going forward, the company emphasized, Donald Trump’s tax bill will result in “a significant reduction” in Meta’s federal cash tax payments.

So don’t worry about it. It was a fluke. And the top-line readout was solid. Sales of $51.24 billion beat estimates by a couple of billion and the growth rate, at 26%, was the best since early 2024. The guide looked a little light, though. Taking the midpoint — $57.5 billion — revenue would grow just under 19% in the current quarter, a marked slowdown.

If you don’t love the guide, blame Reality Labs where revenue will slow as Meta laps a tough comp from the introduction of a Quest headset in Q4 last year. In addition, the company said Quest sales saw a pull-forward effect this year as retailers bought in Q3 “to prepare for the holiday season.”

As for capex, Meta now sees 2025 expenditures, including principal payments on leases, between $70 billion and $72 billion. The low-end there’s up from $66 billion tipped previously.

In addition, Meta guided for higher expenses which, in combination with the tax anomaly, weighed on the stock. “A central requirement to realizing [AI] opportunities is infrastructure capacity,” the company said, adding that,

As we have begun to plan for next year, it has become clear that our compute needs have continued to expand meaningfully, including versus our expectations last quarter. We are still working through our capacity plans for next year, but we expect to invest aggressively to meet these needs both by building our own infrastructure and contracting with third party cloud providers. We anticipate this will provide further upward pressure on our capital expenditures and expense plans next year.

As a result, our current expectation is that capital expenditures dollar growth will be notably larger in 2026 than 2025. We also anticipate total expenses will grow at a significantly faster percentage rate in 2026 than 2025, with growth driven primarily by infrastructure costs, including incremental cloud expenses and depreciation. Employee compensation costs will be the second largest contributor to growth, as we recognize a full year of compensation for employees hired throughout 2025, particularly AI talent, and add technical talent in priority areas.

Generally speaking, the market’s inclined to reward AI spending. But that language has the potential to spook investors, at least in the near-term as it nods to what some might be inclined to call (accurately or not) runaway expense growth.

Oh, and don’t forget the glasses. They’re a big deal. Or at least Mark hopes they are. “Meta Superintelligence Labs is off to a great start and we continue to lead the industry in AI glasses,” he said Wednesday. “If we deliver even a fraction of the opportunity ahead, then the next few years will be the most exciting period in our history.”