Microsoft cuts capex forecast to $170 billion from $175 billion

The past few quarters saw hyperscalers steadily raising capital expenditure forecasts as they raced to build AI infrastructure. Wednesday's reports from Microsoft and Alphabet mark a departure from that pattern, with both companies giving figures below analyst estimates. Microsoft trimmed its annual capex forecast to $170 billion from $175 billion, while Alphabet maintained its range of $195 billion to $205 billion. The numbers suggest a slowdown is not imminent, but they represent a potential point of concern for the AI buildout.

Microsoft CFO Amy Hood noted that delays from third-party GPU providers will push some available capacity until the first half of 2027, though she expects capital spending to accelerate then due to higher component costs. Alphabet's finance chief, Anat Ashkenazi, said outside computing power came online only at the very end of Q3. Alphabet shares fell about 10% in extended trading after missing on earnings and revenue and reporting negative free cash flow of more than $9 billion. Meta, which reported last week, said it expects full-year capex of $135 billion to $145 billion, narrowing its range from $130 billion. As a group, hyperscaler capex is expected to top $1 trillion next year, according to some estimates.