# Microsoft beats with Azure at $33.2 billion; Alphabet shares drop up to 10% on record AI spending

Source: Searchable (https://searchable.pk/news/markets/microsoft-beats-with-azure-at-dollar332-billion-alphabet-shares-drop-up-to)
Type: News article
Author: Searchable Editorial
Published: 29 Oct 2026
Updated: 29 Oct 2026
Retrieved: 29 Oct 2026

> Both cloud businesses grew fast, but investors rewarded Microsoft and punished Alphabet, whose free cash flow turned deeply negative.

Two of the world's biggest AI spenders reported on Wednesday, and the market split them. **Microsoft** shares rose after its cloud business beat forecasts, while **Alphabet**, Google's parent, fell as much as 8% to 10% in after-hours trading as record AI spending pushed its cash flow deep into the red.

## Microsoft: Azure revenue $33.2 billion

For the first time Microsoft gave Azure's revenue in dollars: **$33.2 billion** for July to September, up **48%** from a year earlier, TechCrunch reported. That was about $850 million above the $32.3 billion analysts expected and faster than the 44% to 45% growth CFO Amy Hood had guided in July. Azure is now about 36% of Microsoft's total revenue of **$92.3 billion** for the quarter. A new segment called Agents and Infra, which combines Azure with Microsoft 365's cloud business, made $76.8 billion, up 25%.

The results came days after Microsoft announced thousands of job cuts.

## Alphabet: cloud doubles, cash flow turns red

Alphabet's revenue rose 25% to **$127.6 billion**, 9to5Google reported, a touch below the $127.9 billion consensus cited by Fortune. **Google Cloud** more than doubled to **$30.7 billion**, and YouTube ads rose to $11.2 billion. CEO Sundar Pichai said the **Gemini app** has reached **1 billion users**, "the fastest-growing product in Google's history", and that Search query growth was the highest in five years.

The problem was spending. Capital expenditure hit a record **$51.4 billion** in the quarter, against $24 billion a year earlier, and free cash flow was **minus $9.1 billion**, Fortune reported. Net income fell to $26.2 billion from $34.9 billion, with earnings per share of $2.12, hit partly by an $8.7 billion paper loss on equity investments.

## Side by side

| | Microsoft | Alphabet |
|---|---|---|
| Quarter revenue | $92.3 billion | $127.6 billion |
| Cloud revenue | Azure $33.2 billion (+48%) | Google Cloud $30.7 billion (more than doubled) |
| Stock after results | Up | Down as much as about 10% |

## Why it matters in Pakistan

Azure and Google Cloud host much of what Pakistani startups, banks and freelancers run, and both companies are charging more as AI demand and a global memory shortage push hardware costs up. Pakistani freelancers paid in dollars by US tech clients can check what their earnings are worth with the [currency converter](/tools/finance/currency-converter) and work out tax with the [freelancer tax calculator](/tools/tax/freelancer-tax-calculator).

## Frequently asked questions

**How much did Azure make last quarter?**

Microsoft said Azure brought in $33.2 billion in July to September 2026, up 48% from a year earlier, about $850 million more than analysts expected, TechCrunch reported.

**Why did Alphabet stock fall?**

Revenue of $127.6 billion came in just under the $127.9 billion analysts expected, profit fell, and record capital spending of $51.4 billion pushed free cash flow to minus $9.1 billion, Fortune reported.

## Sources

- Microsoft just shared Azure's actual revenue in dollars: $33.2 billion (TechCrunch): https://techcrunch.com/2026/10/28/microsoft-just-shared-azures-actual-revenue-in-dollars-33-2-billion/
- Alphabet reports Q3 2026 revenue of $127.6 billion (9to5Google): https://9to5google.com/2026/10/28/alphabet-q3-2026-earnings/
- Alphabet's Google Cloud revenue doubles to $31 billion as cash flow stays deep red (Fortune): https://fortune.com/2026/10/28/alphabet-google-stock-drops-cloud-revenue-doubles-free-cash-flow-negative/

How to cite: "Microsoft beats with Azure at $33.2 billion; Alphabet shares drop up to 10% on record AI spending", Searchable, 29 Oct 2026, https://searchable.pk/news/markets/microsoft-beats-with-azure-at-dollar332-billion-alphabet-shares-drop-up-to