Microsoft Defies Rivals in Cloud Cash Flow as AI Spending Bites
Major US cloud giants are feeling the pinch of AI infrastructure spending, with only Microsoft generating positive free cash flow in its fiscal Q4 2026. The company closed the quarter with a $19.6 billion cash balance and a trailing-twelve-month free cash flow figure not yet confirmed at press time.
Alphabet and Amazon slipped into negative territory under the weight of surging AI infrastructure spending, burning $5.9 billion and $7.6 billion in Q2 2026 respectively. Their capex guidance has been raised to $195-205 billion for Alphabet and $220 billion for Amazon.
Mary Hood, CFO at Microsoft, offered some reassurance on capital discipline, noting that the largest component of capex has shifted toward shorter-lived assets like CPUs and GPUs. If demand changes, they can slow down this spending, she said.