The world’s largest cloud providers used their latest quarterly reports to tell Wall Street the same thing: AI infrastructure spending is going higher and it isn’t slowing down. 

Hyperscalers Microsoft, Alphabet, Amazon and Meta either raised full-year capital-expenditure guidance or signaled that next year’s spend will climb more — and investors, increasingly focused on the widening gap between outlays and returns, punished some of their stock for it.

Alphabet, the parent company of Google, set the tone on July 22 during its Q2 earnings call. The company raised its 2026 CapEx forecast to between $195 billion and $205 billion, up from the $180 billion to $190 billion range that was expected in April, and its third increase this year, Google Chief Financial Officer Anat Ashkenazi, said during the call.

Second-quarter CapEx reached $44.9 billion, double the Q2 2025 figure, while quarterly free cash flow turned negative to $5.9 billion, a first for the company.

“We expect the free cash flow will remain under pressure, driven by our investments in technical infrastructure, which enables us to capitalize on the AI opportunity and continue to drive attractive returns,” Ashkenazi, said.

That came despite Google Cloud revenue surging 82% to $24.8 billion on enterprise AI demand. Google shares fell 4% to $326 in after-hours trading July 22 even as revenue rose 24% to $119.8 billion.

Amazon delivered the season’s strongest cloud acceleration. Amazon Web Services (AWS) revenue grew 36.8% YoY to $42.2 billion. In a first for Amazon, total revenue surpassed $200 billion at $200.6 billion, up 20% YoY, according to the company’s Q2 earnings release. 

Amazon Chief Executive Andy Jassy lifted 2026 CapEx guidance to “approximately” $220 billion, up from $200 billion projected earlier in April, citing rising memory prices. 

Jassy warned the capacity crunch would persist, saying AWS would still lack capacity to meet demand in 2026, and that the same dynamic would likely hold in 2027, and added that enterprise demand already visible for 2028 is “striking.”

Amazon shares jumped 9% to $235 billion after-hours rading ton July 30.

For its fiscal fourth quarter, which ended June 30, Microsoft reported revenue rose 18% year over year to $90.01 billion.

Microsoft Cloud revenue for the fourth fiscal quarter climbed to $59.3 billion, up 27% YoY, and CapEx reached $41 billion, up 70% YoY, according to the  Q2 earnings report.

The company spent $175 billion on AI CapEx during the FY 26  and expects to spend over $200 billion in fiscal 2027, according to its earnings report.

“Roughly two-thirds of our CapEx was for short-lived assets — primarily CPUs and GPUs — as customers increasingly build solutions that leverage both AI and non-AI infrastructure,” CFO Amy Hood said during the Q2 earnings call.

Management forecast Q1 2027 CapEx to exceed $50 billion, according to the earnings report.

Meta similarly posted $31 billion in CapEx, up 83% YoY in Q2, July 29.

“The question and thinking about this is we believe that there will continue to be a significantly higher margin on selling intelligence rather than selling compute directly,” Mark Zuckerberg, chief executive of Meta said during the earnings. “But we think that there’s a big opportunity obviously to sell compute as well.”

Meta declined to provide a specific outlook for 2027 CapEx in its Q2 earnings call.

“Infrastructure planning remains highly dynamic and even this year, there are a range of outcomes embedded in our outlook,” CFO Susan Li, said during the company’s earnings call.

Collective AI CapEx 

The individual earnings reports indicate an industrywide bet of historic scale. 

Morgan Stanley CEO Ted Pick, said during the company’s Q2 earnings call that AI CapEx in the United States will hit $1.5 trillion by 2028. 

Collectively, the AI CapEx for big tech for 2026 is $732 billion, up 77%YoY. 

According to a note from Moody’s Ratings on July 22, AI CapEx is expected to exceed $1 trillion in 2027, and an increasing share of the financing is to come from debt issuance by tech giants. 

“Credit metrics are still very strong for most of these companies, but a material shift in the structure of their balance sheets is becoming evident,” the report stated. “While these are among the most cash-rich companies in history, the current level of spending has prompted significant borrowing, with reported debt for the six hyperscalers at about $460 billion.” 

Debt financing among hyperscalers accounted for $62 billion in 2024, compared to $117 billion for the first half of 2026, according to the report. 

Google, for one, has logged over fivefold growth YoY in its debt-to-finance AI buildout. 

“We have expanded our debt portfolio quite significantly over the past 12 months,” CFO Ashkenazi, said during the Q2 earnings call. “If you’ve seen a year ago, we were at about $16 billion, and we went to about $100 billion across multiple currencies and geographies.” 

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