Key points
- The investment scale of three tech giants is approaching $600 billion.
- Cloud business growth accelerated, but cash flow came under pressure.
- The upcoming earnings report will test market confidence in AI spending.
Microsoft, Amazon, and Google’s parent company Alphabet are investing massive amounts of money to build the infrastructure behind artificial intelligence. This week, investors will see whether their cloud businesses are growing fast enough to justify these costs.
Driven by AI computing demand fueling data center construction and chip procurement, these three tech giants could collectively invest nearly $600 billion by 2026. Their signed but unfilled cloud service backlog has also approached $1.7 trillion.
Microsoft and Alphabet, Google’s parent company, will release their earnings reports on Wednesday, October 28, while Amazon will report on Thursday. These earnings reports are particularly crucial as Wall Street grows increasingly concerned about how quickly AI investments can translate into cash returns.
As demand for AI accelerates, Google Cloud's growth could reach 95%.
For investors, the encouraging news is that customers are purchasing computing power faster than cloud service providers can bring these capacities online.
According to Reuters, analysts expect Google Cloud's revenue for the quarter ending in September to increase by 95.1% year-over-year. Microsoft’s Azure business is projected to grow by 47.7%, while Amazon’s cloud service, AWS, may see a 38.2% increase.
Such growth is unusual for businesses that already generate billions of dollars in revenue each quarter.
However, these companies must first build expensive infrastructure to meet a large portion of this demand.
Amazon has outlined a capital expenditure plan of approximately $220 billion for 2026, while Alphabet’s investment plan is estimated at $195 billion to $205 billion. Microsoft’s spending, calculated on a calendar year basis, could reach approximately $175 billion, including lease financing.
Although AWS grew 37% last quarter, this expansion has already put pressure on Amazon's cash flow.
As chip costs and infrastructure expenses rise, investors will also assess whether Google Cloud can maintain profitability.
Wall Street wants to see more than just cloud revenue growth
The biggest concern now is no longer whether AI customers exist, but whether the business can generate enough revenue from them to cover the rising costs of building and operating increasingly expensive infrastructure.
According to an analysis by S&P Global Market Intelligence on October 26, major cloud infrastructure companies' capital expenditures could reach $763 billion in 2026 and rise to $1.3 trillion in 2027.
These predictions cover a broader range of companies than Microsoft, Alphabet, and Amazon combined.
Building a data center requires purchasing GPUs, ensuring power supply, developing network systems, and paying construction companies—all before the new facility reaches full capacity.
Coinpaper previously reported on the flow of AI spending, noting that equipment suppliers may receive revenue before the companies funding these projects see returns.
What should investors look for in the earnings reports of major technology companies?
Questions facing Microsoft include the profitability of Azure, the adoption of Copilot, and its growing commitments to infrastructure investment. The market also expects the company to provide more detailed financial disclosures for Azure.
Amazon must demonstrate that the accelerated demand for AWS will ultimately help it restore stronger free cash flow.
These issues also reflect the broader debate surrounding AI's return on investment: revenue growth alone does not tell the whole story.
Recent research by Apollo also found that evidence of productivity gains remains limited, aside from the largest tech companies.
Author: Emir Abyazov
Emir Abyazov is the editor-in-chief of Coinpaper, responsible for driving data-driven editorial operations, SEO-focused content discovery, and audience-first narratives around crypto, AI, and fintech.