In the third quarter of 2026, Alphabet, Amazon, and Meta saw their free cash flow drop below zero or had to borrow heavily to finance their AI infrastructure. Microsoft remains positive at $18.6 billion, notably relying on leasing. Free cash flow corresponds to the money remaining after operating expenses and investments.
- Alphabet, Amazon and Meta see their free cash flow fall below zero or borrow heavily.
- Microsoft stays positive at $18.6 billion, but relies partly on leasing.
- Amazon raised $48.1 billion in debt, while Meta borrowed nothing despite negative cash flow.
- Customers wait for capacity because demand still exceeds supply.
At Alphabet, Google’s parent company, the third-quarter accounts, published on October 28, show a gap between operations, which brought in $42.3 billion, and investments, which absorbed $51.4 billion. The flow therefore stands at negative $9.1 billion, after negative $5.9 billion in the second quarter. On a trailing twelve-month basis, it remains positive at $19.7 billion. The group raised $49.6 billion in equity and mandatory convertible preferred shares in June, then $28.7 billion in bonds in the third quarter. It also stopped buying back its own shares: $11.5 billion from July to September 2025, nothing in the same months of 2026.
Microsoft finances its servers with its revenue
On the same day, Microsoft’s results for its first quarter of fiscal year 2027, ended September 30, showed the opposite situation. Operations generated $58 billion and equipment purchases cost $39.4 billion, leaving $18.6 billion in free cash flow. Its CFO, Amy Hood, forecasts positive cash flow for the fiscal year.
This figure, however, has a limit, which the executive herself mentioned during the October 28 conference call: “There is a form of financing called leasing, and we use that as a vehicle.” The $45.2 billion in reported investments includes $7.4 billion in finance leases. Amy Hood indicated that Microsoft had “not yet” tapped the bond market and would turn to “additional sources of financing” when it deemed it advantageous.
Amazon borrows, Meta stays at zero
At Amazon, published on October 29, operations brought in $42.4 billion for the quarter, against $77.3 billion in equipment purchases. After deducting $1.4 billion from disposals and grants, there is a shortfall of approximately $33.5 billion, a calculation performed by ActuIA. The group raised $48.1 billion in long-term debt during the quarter, which now stands at $173.1 billion, compared to $65.6 billion at the end of 2025. Amazon also maintains a forecast of approximately $220 billion in investments for 2026.
Meta, whose results were published as early as October 21, shows negative cash flow of $2.1 billion, compared to positive $10.6 billion a year earlier. The group borrowed nothing during the quarter, but its long-term debt has increased by $22 billion since December. Its 2026 investment forecast has been tightened to between $135 and $145 billion.
Customers waiting for capacity
Microsoft also lowered its forecast for the calendar year to approximately $170 billion from $175 billion in July. The quarter was expected to exceed $50 billion in investments and stopped at $45.2 billion because “some third-party capacity deliveries expected in the first quarter were delayed,” according to Amy Hood, who added: “Customer demand continues to exceed available supply.” Its backlog of commercial contracts remaining to be fulfilled reached $677 billion, up 73% year-on-year.
According to the Wall Street Journal, AWS, Google, and Microsoft provided Anthropic with less capacity than the publisher of Claude requested. At Alphabet, CFO Anat Ashkenazi spoke of a “supply-constrained environment,” with Google having used third-party compute since late September, at the cost of pressure on short-term margins, according to a transcript of the call published by The Singju Post. Alphabet maintains its 2026 forecast between $195 and $205 billion, and Anat Ashkenazi stated: “We still anticipate a significant increase in our investments in 2027.”
