TLDRocket
29 October 2026
Microsoft and Google are both telling the same story in different financial dialects: AI demand is outpacing hardware, and budgets are paying for it—loudly. Microsoft’s Azure growth is strong, but so is the spend. CapEx is expected to reach about $170 billion in calendar-year 2026, including more than $50 billion in the latest quarter, even as operating margins take a near-term hit. Alphabet’s numbers rhyme. Google Search and other brought in $63.4 billion (49.7% of $127.6 billion revenue), but its growth slowed while Google Cloud more than doubled to $30.7 billion. The catch: Alphabet’s free cash flow stayed deeply negative at -$9.1 billion, and shares fell more than 11% after hours as investors fixated on capital intensity—toward a projected $200 billion in AI-related spending.
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