Microsoft and Alphabet both declined to raise their AI spending forecasts on 28 October, and the companies that rent them computing power took the hit in the stock market. CNBC reported that shares of CoreWeave, Nebius and IREN fell after the earnings reports, and so did Oracle’s.
The figure in question is capex, short for capital expenditure: money spent on things a company will use for years, which here means data centers, chips, and the servers that hold them. Microsoft cut its full-year number from $175 billion down to $170 billion. Alphabet left its range alone, at $195 billion on the low end and $205 billion on the high end. Both came in under what analysts expected, per CNBC’s Jordan Novet.
After several quarters of forecasts that only climbed, a flat or lower number looks like a pause. It is not one. Microsoft CFO Amy Hood said she expects spending to speed up in early 2027 because components cost more and some deliveries are late.
The lateness is the more interesting part. Hood told analysts that outside providers of graphics chips had delays that will push some capacity into the first six months of 2027. She named no one, though CoreWeave, IREN and Nebius all sell to Microsoft. Alphabet finance chief Anat Ashkenazi said outside computing power “came online only at the very end of Q3.” Both companies wanted to spend more, and their suppliers could not hand over the machines in time.
Those suppliers are the neoclouds, newer companies that rent out racks of AI chips. According to CNBC, they need billions of dollars from outside lenders but lack investment-grade credit ratings. Interest rates are rising, worries about their debt are growing, and lenders are stepping back. Gartner analysts told CNBC they expect 80% of neoclouds to be absorbed or shut down by 2030. Firmus, an Australian neocloud backed by Nvidia, pulled its plan to go public this month even though Meta and OpenAI had committed to large usage.
The two reports landed very differently. Alphabet fell about 10% in extended trading after missing on earnings and revenue and burning through more than $9 billion in cash after its spending (negative free cash flow). Microsoft beat on both, as its Azure cloud unit grew sales 48%, and Cantor analysts moved their twelve-month stock target up from $608 to $630. Meta, which reported a week earlier, also reported negative free cash flow while lifting the bottom of its capex range to $135 billion, with a top of $145 billion.
Delays matter more now because Anthropic is preparing to go public. Much of its computing comes from Amazon, Google and Microsoft, with more from SpaceX, Lambda and Nscale, and its Claude assistant has been unavailable at times this year when demand climbed. OpenAI, which has said a 2027 listing is likely, has the same hunger for capacity. A neocloud that cannot deliver on schedule is a problem for them as much as for Microsoft.
CNBC puts hyperscaler capex above $1 trillion next year. Amazon reports on Thursday, which completes the quarter’s picture. Any AI company that rents capacity from a neocloud should plan around Hood’s date: if Microsoft is waiting until 2027 for machines it ordered, a smaller buyer should not count on a faster delivery.
Reported by CNBC on 29 October 2026, by Jordan Novet.
