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last wk.

Cloud Revenues Surge as AI Capex Sends Tech Stocks Lower

Investor doubt about whether massive data‑center spending will deliver profits rose after Google missed ad expectations and its stock plunged.

Un opérateur à la Bourse de New York, le 4 août 2025
Euronext, dans le quartier d’affaires de La Défense, à l’ouest de Paris, le 9 octobre 2025.
La maison mère de Google a raté la cible pour le chiffre d'affaires et le bénéfice net, ce qui lui a valu d'être immédiatement sanctionnée dans les échanges électroniques postérieurs à la clôture de Wall Street, le titre abandonnant plus de 9%.
Un opérateur à la Bourse de New York, le 28 septembre 2026

Overview

  • Alphabet reported third‑quarter results below expectations and a roughly 25% fall in net income, and its shares tumbled about 10–13% in trading the next day, erasing roughly $480–500 billion in market value.
  • Cloud businesses showed strong growth with Google Cloud up about 102%, Microsoft Azure up about 48%, and Amazon Web Services up about 39%, driven by demand for AI model training and inference.
  • Companies are pouring record sums into AI infrastructure: Alphabet spent about $51 billion, Microsoft about $45 billion, and Amazon about $77.3 billion in the quarter, creating large cash outflows and, in Amazon’s case, negative free cash flow and higher long‑term debt.
  • Markets pushed down broad tech and chip stocks after the earnings, with weak guidance from Intel and investor concern that heavy AI investments are not yet translating into reliable profits.
  • The near‑term story to watch is company guidance and cash‑flow trends because investors will use those signals to judge whether the current wave of AI capex can be financed without sustained profit erosion or major changes to financing plans.