Big Tech earnings lift cloud revenue as AI spending climbs
Alphabet reported third-quarter revenue of $127.6 billion, up 25 percent year on year, with Google Cloud revenue of $30.7 billion, up 103 percent. Microsoft's Azure cloud business grew 48 percent in its fiscal first quarter ended September, and it lowered its full-year capital expenditure forecast to $170 billion from $175 billion. Alphabet posted negative free cash flow of $9.07 billion as spending rose, and its shares fell about 8 to 10 percent after the results, according to reports. Microsoft shares rose more than 3 percent in after-hours trading. The results came as investors weighed how much companies spend on AI against the income it generates.
Key facts
- Microsoft generated $18.6 billion in free cash flow, about $10 billion above analyst expectations.
- Microsoft CFO Amy Hood said GPU supplier delays push some capacity into the first half of 2027.
- Alphabet kept its 2026 capital expenditure guidance at $195 billion to $205 billion.
- Google Search revenue grew 12 percent year on year, slowing from 17 percent in the second quarter.
- Meta posted its first cash burn in more than a decade and plans to issue new stock.
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Why it matters
Heavy AI spending by the largest cloud firms is now under closer investor scrutiny.
What changed
First published from Hindustan Times, CNA, The Verge, TechCrunch and Asharq Al-Awsat