Microsoft Leads Hyperscaler Peers in Free Cash Flow as AI Spending Rises
Microsoft stands out among US hyperscalers as one of the few companies still generating positive free cash flow, despite rivals pouring hundreds of billions into artificial intelligence infrastructure.
Alphabet turned free cash flow negative in the second quarter after capital spending surged to $44.9 billion. Amazon's trailing 12-month free cash flow also slipped to negative $7.6 billion as it raised its 2026 capital spending plan to about $220 billion.
META remained slightly positive, but its cash balance fell sharply as spending accelerated. In contrast, Microsoft is spending heavily too, with fiscal 2026 capital expenditures running around $175 billion.
The key difference is that Azure growth remains strong enough to absorb more of that investment. Azure revenue climbed 43%, and annual Azure revenue surpassed $100 billion.