Hyperscaler Earnings Three Way

Three hyperscalers reported this week, and the cloud growth numbers were the least interesting part.

Google Cloud grew 103% to $30.7B. Azure grew 48%. AWS grew 39% to $46.0B. Demand is not the question anymore.

The question is who pays for the buildout and how. Alphabet spent $51.4B on capex in the quarter, and its free cash flow turned negative for a second straight quarter, about -$9B. Microsoft spent heavily too and still generated roughly $19B in free cash flow. Amazon put $75.9B of cash into capex in a single quarter and guided to about $220B for the year, with more to come in 2027.

The market noticed. Alphabet fell about 11% despite the fastest cloud growth of the three. Microsoft held up. Amazon slipped after hours.

My read: the first phase of the AI buildout was priced on growth. The next phase gets priced on cash conversion. Microsoft's CFO also said third-party chip delays will push some capacity into the first half of 2027, so even unlimited budgets do not buy capacity on demand.

For anyone building on these platforms, that matters. The provider with the strongest balance sheet has the most room to keep prices stable and capacity available.

Which hyperscaler would you bet on to turn this spending into durable margin, and why?

Sources: https://www.cnbc.com/2026/10/29/microsoft-google-ai-capex-estimates.html https://ir.aboutamazon.com/news-release/news-release-details/2026/Amazon-com-Announces-Third-Quarter-Results/