Microsoft Tops Alphabet in AI Race as Azure Grows 48% and Spending Stays Below Forecasts
Updated
Updated · CNBC · Oct 29
Microsoft Tops Alphabet in AI Race as Azure Grows 48% and Spending Stays Below Forecasts
3 articles · Updated · CNBC · Oct 29
Summary
Microsoft’s latest quarter strengthened the case for disciplined AI spending, with Azure revenue up 48% and capital expenditures plus finance leases at $45.2 billion, below Wall Street forecasts.
That combination helped shift investor focus from sheer AI buildout to returns, as Microsoft stayed free-cash-flow positive and showed growing traction for its Copilot business software.
Alphabet moved the other way: shares plunged after it missed earnings and revenue estimates, with Search and YouTube ad sales both falling short despite Google Cloud revenue more than doubling.
Its AI outlays are now under heavier scrutiny because Alphabet expects $195 billion to $205 billion in annual capital spending, free cash flow was negative for a second straight quarter, and $27.6 billion in authorized stock sales could pressure the stock.
The contrast suggests Wall Street is no longer automatically rewarding Big Tech for AI expansion, instead favoring companies that can prove spending discipline and near-term payoff.