As earnings loom, Alphabet and Microsoft see record-high CDS spreads

On October 26, 2026, Bloomberg reported that Alphabet, Amazon and Microsoft were expected to report earnings later that week, with all three on track for double-digit revenue gains. The report framed the moment around rising investor impatience with AI capex: the spending has been enormous, and the market has been increasingly pressing for returns to show up in the numbers.

Two days later, on October 28, Bloomberg reported that shares of Microsoft Corp. and Alphabet Inc. had gone separate ways since the companies' previous earnings reports, as Wall Street focused more closely on how heavy AI spending is weighing on corporate bottom lines. That same day, Bloomberg data showed credit derivatives moving ahead of the print. Alphabet's five-year credit default swap (CDS) touched a record high the previous Friday, with a 16% gain for October alone. Microsoft's five-year CDS also hit an all-time high on the same day, up almost 9% for October and heading toward a fifth consecutive monthly advance, which would be its longest streak on record. The signal, as one report put it, is that even mega-cap technology names long treated as market havens are seeing their credit risk premium quietly drift upward.

Both companies are scheduled to report quarterly results after the close on Wednesday. Analysts are looking principally at cloud growth, widely treated as a barometer for AI demand, and at whether capital spending can generate sufficient cash-flow returns. Meta's earnings the previous week, followed by a 7% one-day selloff after it raised future spending plans, sharpened that focus. The divergence between the two has been striking: Microsoft shares have gained 36% since its July 29 report, when it posted its fastest cloud growth in four years and the stock jumped 16% in a single session, its biggest daily gain since 2008, while Alphabet has lagged. As of now, the story stands just ahead of both earnings releases, with actual results not yet out.