{"id":817599,"date":"2026-10-29T13:20:12","date_gmt":"2026-10-29T13:20:12","guid":{"rendered":"https:\/\/www.newsbeep.com\/uk\/817599\/"},"modified":"2026-10-29T13:20:12","modified_gmt":"2026-10-29T13:20:12","slug":"alphabet-and-microsoft-are-on-both-sides-of-the-ai-booms-biggest-bills-chart-of-the-day","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/uk\/817599\/","title":{"rendered":"Alphabet and Microsoft are on both sides of the AI boom’s biggest bills: Chart of the Day"},"content":{"rendered":"\n

Wall Street bought Microsoft and sold Alphabet after the two reported quarterly earnings Wednesday night. Both rent computing power to the AI labs and own stakes in them, but this quarter Microsoft cashed in<\/a> while Alphabet’s bets cost it. <\/p>\n

Microsoft (MSFT<\/a>) stock rose about 2% after hours, while Alphabet (GOOGL<\/a>, GOOG<\/a>) fell over 9%, on track for its worst day since October 2023, after its sales came up short<\/a>. <\/p>\n

For Microsoft, the labs show up as sales. OpenAI paid it $10 billion in the quarter that ended in September, according to Microsoft’s quarterly filing. That’s about 11% of Microsoft’s $92 billion in revenue, and more than its Xbox and Windows businesses brought in combined. <\/p>\n

\"Horizontal<\/a> Microsoft, Bloomberg, Yahoo Finance <\/p>\n

Some of that money is still owed. OpenAI’s unpaid bills to Microsoft rose to about $7 billion from $6 billion three months earlier. Microsoft also owns about 24% of the ChatGPT maker, but the stake barely moved its profit this time. <\/p>\n

The order book cooled, too. Microsoft’s backlog<\/a> \u2014 revenue customers have signed up for, but Microsoft hasn’t yet booked \u2014 slipped to about $677 billion, and new bookings fell 12% from a year earlier. CFO Amy Hood blamed “large Azure commitments in the prior year” for the tough comparison. <\/p>\n

Alphabet’s bets on the labs worked the other way. Its stakes in other companies, including roughly 14% of Anthropic and a piece of SpaceX (SPCX<\/a>), supplied about $6 of its $9.11 in per-share profit in the second quarter. <\/p>\n

This time they cost it. A nearly $9 billion loss on those holdings cut earnings by $0.55 a share, to $2.12. CFO Anat Ashkenazi said on the call that the loss came “primarily” from SpaceX, whose stock dropped about 12% during the quarter. <\/p>\n

\"Stacked<\/a> Alphabet, Yahoo Finance <\/p>\n

Alphabet is also footing the bill to build. It spent $51 billion on data centers and equipment in the quarter, more than double a year earlier, and burned about $9 billion in free cash flow<\/a> \u2014 the cash left after those investments \u2014 for a second straight quarter. Microsoft generated about $19 billion and said it expects to stay positive this fiscal year. <\/p>\n

To cover the gap, Alphabet bought back no stock, sold about $29 billion of bonds and $12 billion of new shares, and nearly tripled its long-term debt this year to about $125 billion. Meta (META<\/a>) took a similar route with its nearly $100 billion stock sale<\/a>. <\/p>\n

The payoff is showing up in Google Cloud, where revenue doubled to about $31 billion and the backlog of signed contracts rose to $561 billion from $514 billion three months earlier. Anthropic has committed at least $115 billion to Google<\/a> for computing power, according to its IPO filing, about a fifth of that backlog by Yahoo Finance calculations. <\/p>\n

The next swing could come from Anthropic itself. Its IPO could start trading as soon as Nov. 16<\/a>, and once it does, Alphabet’s stake gets valued at the market price each quarter. At the reported $1.5 trillion to $2 trillion valuation, that could turn the drag back into a windfall by year-end. <\/p>\n

Microsoft CEO Satya Nadella doesn’t want to lean on the labs forever. Asked on the call where Azure’s AI growth is coming from, he said he’s after breadth, not “four customers who buy a lot of capacity from you and you can show a few quarters of growth.” <\/p>\n

“That’s not a business as far as I’m concerned,” he said. <\/p>\n

Internal AI tools helped analyze interview transcripts, research, and draft this post. Humans reviewed, edited, and fact-checked this post before publication. <\/p>\n

Jared Blikre is the global markets and data editor for Yahoo Finance. Follow him on X at @SPYJared<\/a> or email him at jaredblikre@yahooinc.com. <\/p>\n

Click here for in-depth analysis of the latest stock market news and events moving stock prices<\/a> <\/p>\n

Read the latest financial and business news from Yahoo Finance<\/a> <\/p>\n","protected":false},"excerpt":{"rendered":"Wall Street bought Microsoft and sold Alphabet after the two reported quarterly earnings Wednesday night. Both rent computing…\n","protected":false},"author":2,"featured_media":817600,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[20],"tags":[11456,554,733,4308,84,273,1294,4176,5555,1086,13908,5467,4377,1891,4517,4174,4769,4655,4204,4762,5556,5557,3356,5042,474,86,13909,56,54,55],"class_list":["post-817599","post","type-post","status-publish","format-standard","has-post-thumbnail","category-artificial-intelligence","tag-401k","tag-ai","tag-artificial-intelligence","tag-artificialintelligence","tag-business","tag-business-news","tag-economy","tag-finance","tag-financial-information","tag-investing","tag-investment-tools","tag-investor","tag-market-news","tag-mortgage","tag-mutual-funds","tag-personal-finance","tag-quote","tag-real-estate","tag-retirement","tag-stock","tag-stock-research","tag-stock-valuation","tag-stocks","tag-suze-orman","tag-tax","tag-technology","tag-track-portfolio","tag-uk","tag-united-kingdom","tag-unitedkingdom"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/posts\/817599","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/comments?post=817599"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/posts\/817599\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/media\/817600"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/media?parent=817599"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/categories?post=817599"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/tags?post=817599"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}