This week’s results from the largest technology companies were a test of whether record spending on artificial intelligence is paying off. The answer from investors was mixed.
Alphabet and Microsoft
Alphabet reported third-quarter revenue of $127.58 billion, up 25%, and Google Cloud revenue of $30.71 billion. But capital spending reached $51.3 billion in the quarter and free cash flow was negative $9.1 billion, the second negative quarter in a row. Full-year capital spending could reach $205 billion. The shares fell about 11%. Microsoft fared better: revenue rose 19% to $92.3 billion, Azure grew 48%, and free cash flow stayed positive at $18.6 billion despite $45.2 billion of capital spending. Its commercial backlog rose 73% to $677 billion.
Amazon, Meta and Intel
Amazon’s revenue rose 12.1% to $201.94 billion, slightly below expectations, with AWS growing 39%. The company kept its 2026 capital spending forecast at about $220 billion and reported negative free cash flow; its shares fell almost 7% before the open on Friday. Meta has narrowed its 2026 capital spending guidance to $135–145 billion. Intel fell about 25% in pre-market trading after guiding fourth-quarter revenue below expectations, even though its data centre and AI revenue grew 78%.
Why it matters for leaders
The AI build-out is real and still accelerating, but markets are starting to ask about returns. For companies adopting AI, the practical lesson is the same one investors are applying to Big Tech: tie every AI investment to a measurable business result.
Sources
- Yahoo Finance: Alphabet sinks 11% as AI spending pushes cash flow negative again
- Charles Schwab: Market update, 30 October 2026
- AI Weekly (Bloomberg): Earnings will judge whether $800B AI capex pays off
Photo: Tony Marinescu / Unsplash