Why it matters
- Microsoft, Alphabet and Meta spent a combined $125.6 billion on property and equipment in the quarter ended Sept. 30, up 100% from $62.7 billion a year earlier, their earnings releases show.
- That spending used 94% of the $133.1 billion of cash their businesses generated. Combined free cash flow fell to $7.4 billion from $60.7 billion, by Global Terminal's calculation.
- Cloud sales are growing fast enough to show the spending is finding customers. Google Cloud revenue rose 103% to $30.7 billion and Microsoft's Azure revenue rose 48% to $33.2 billion.
Analysis: this piece includes our interpretation of the facts reported.
Microsoft, Alphabet and Meta Platforms spent a combined $125.6 billion on property and equipment in the July-to-September quarter, double the $62.7 billion they spent a year earlier, according to their earnings releases. Alphabet and Microsoft reported on Wednesday, Oct. 28, and Meta on Oct. 21. The spending absorbed 94% of the cash the three businesses generated.
Their combined free cash flow, operating cash minus capital spending, fell to $7.4 billion from $60.7 billion a year earlier, by Global Terminal's calculation from the releases.
How much did Big Tech spend on capex in the third quarter?
Alphabet spent the most, $51.36 billion, up 114% from a year earlier. Microsoft spent $39.37 billion, up 103%, and Meta $34.91 billion, up 80%. Meta's figure includes principal payments on finance leases, as the company reports it. Alphabet's and Microsoft's are cash purchases of property and equipment.
| Quarter ended Sept. 30, 2026 | Microsoft | Alphabet | Meta |
|---|---|---|---|
| Capital expenditures | $39.37 billion | $51.36 billion | $34.91 billion |
| Year-ago capex | $19.39 billion | $23.95 billion | $19.37 billion |
| Capex change | +103% | +114% | +80% |
| Revenue | $92.28 billion (+19%) | $127.58 billion (+25%) | $64.60 billion (+26%) |
| Capex as share of revenue | 42.7% | 40.3% | 54.0% |
| Operating cash flow | $58.00 billion | $42.29 billion | $32.79 billion |
| Free cash flow | $18.63 billion | -$9.07 billion | -$2.12 billion |
| Year-ago free cash flow | $25.66 billion | $24.46 billion | $10.63 billion |
| Cloud growth | Azure +48% to $33.17 billion | Google Cloud +103% to $30.71 billion | No cloud unit |
Sources: company earnings releases (Exhibits 99.1 to Form 8-K). Alphabet and Meta report free cash flow; Microsoft does not, so its figure, year-ago figures for Microsoft and Alphabet, and the capex shares are Global Terminal calculations. Microsoft's quarter is the first of its 2027 fiscal year.
Which company has negative free cash flow?
Alphabet and Meta both spent more than they brought in. Alphabet's free cash flow was negative $9.07 billion, its second straight negative quarter after negative $5.86 billion in the April-to-June quarter, the company said. Meta's was negative $2.12 billion, down from positive $10.63 billion a year earlier. Meta's operating income also fell 37%, in part because of a $9.89 billion legal charge.
Microsoft stayed positive. Its operating cash flow rose 29% to $58.0 billion, so capex used 68% of it, against 121% at Alphabet and 107% at Meta.
How are they paying for it?
With outside money and smaller buybacks. Alphabet raised $28.7 billion of senior notes in the quarter and sold $12.4 billion of stock through an at-the-market program, its release said. It repurchased no shares, against $11.5 billion a year earlier. Meta's board approved a new non-voting Class C stock, effective in January 2027, in part to provide "the ability to finance its growth," Meta said. Microsoft repurchased $4.38 billion of stock, down from $5.65 billion.
Is the spending bringing in revenue?
Cloud revenue says yes, so far. Google Cloud revenue rose 103% to $30.71 billion and its operating income tripled to $11.12 billion, Alphabet said. Microsoft Cloud revenue rose 30% to $63.9 billion, with Azure up 48%, and Microsoft's commercial remaining performance obligation, contracted revenue not yet recognized, rose 73% to $677 billion. Meta has no cloud business. It said AI is already "delivering substantial incremental advertising revenue," and its revenue rose 26%.
The spending is not slowing. Meta expects 2026 capex of $135 billion to $145 billion, including finance leases, and said it expects "to continue investing aggressively" in 2027. Alphabet has spent $131.95 billion on property and equipment in the first nine months of 2026.
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