Overview
- Alphabet reported third‑quarter results on Wednesday that showed revenue rose 25% to $127.6 billion and Google Cloud more than doubled to about $30.7 billion but the company booked an $8.7 billion investment loss and recorded negative free cash flow, pushing its stock sharply lower.
- Microsoft topped expectations for Azure, which generated roughly $33.17–33.2 billion and helped the company produce strong free cash flow of $18.6 billion, underscoring healthier near‑term cash conversion than some peers.
- At Oracle’s investor day on Wednesday the company said capital spending will peak this year and next, pledged to raise no more than $20 billion more in financing through fiscal 2030, and forecast free cash flow turning positive in the second half of fiscal 2028.
- Analysts and industry estimates continue to project massive hyperscaler investment in AI infrastructure with more than $700 billion expected for 2026 and forecasts such as JPMorgan’s that Google Cloud could rival Search revenue by late 2028, driven in part by sales of Google’s custom TPUs and large enterprise backlogs.
- The spending race raises practical risks and ripple effects for customers, workers and investors because it depends on converting multiyear cloud contracts and chip supply into revenue while firms manage heavy capital needs, higher borrowing and tighter market tolerance for negative cash flow.