Overview
- This week investor scrutiny intensified after Alphabet raised its 2026 capex outlook and shares fell, resetting expectations that revenue beats alone will not excuse bigger infrastructure budgets.
- Microsoft beat revenue forecasts with $90 billion and said Azure topped $100 billion annualized, but the company reported a record roughly $41 billion quarter in capital spending and a sharp drop in free cash flow.
- Meta posted $60.8 billion in Q2 revenue but missed on profit as quarterly capex nearly doubled to about $31 billion and the company raised its full‑year capex range to $130–$145 billion, leaving free cash flow near zero.
- Analysts estimate combined capex across Microsoft, Meta, Alphabet and Amazon at roughly $700 billion for 2026 with 2027 projections above $1 trillion and rating agencies such as Moody’s warning the scale could pressure credit metrics.
- Investors now want firm signals that capex will peak or monetize faster, so markets will watch Azure growth, any cuts or guidance on future spending, and evidence that companies can sell third‑party compute or otherwise turn infrastructure into timely profits and cash.