Azure hits $33.2 billion and Google Cloud doubles to $30.7 billion, but only Microsoft's spending still pays for itself

In brief

Developing: share moves were still settling in after-hours trading. Last updated 29 October 2026, 08:30 Dubai time (UTC+4).

Microsoft and Alphabet both reported results on 28 October for the quarter to 30 September. Now that Microsoft has disclosed Azure in dollars for the first time, the two cloud businesses can be compared directly. Azure brought in $33.2 billion and Google Cloud $30.7 billion.

Microsoft: Azure becomes its biggest business

In its fiscal 2027 first-quarter release, Microsoft reported Azure revenue of $33,165 million, up 48% from $22,384 million a year earlier. CNBC reports this is the first time Microsoft has disclosed Azure in dollars.

Total revenue rose 19% to $92.3 billion, and Microsoft Cloud revenue rose 30% to $63.9 billion, the release says. Commercial remaining performance obligation, which is contracted revenue not yet recognised, rose 73% to $677 billion. Additions to property and equipment reached $39.4 billion, up from $19.4 billion. On the release's cash-flow figures, free cash flow was about $18.6 billion, down roughly 27%. That is a ByteNib calculation. Earlier this week we noted Microsoft would report days after opening voluntary buyouts. The earnings release does not mention that offer.

Alphabet: cloud doubles, cash flow turns negative

Alphabet says Google Cloud revenue rose 103% to $30.7 billion, from $15.2 billion. It credits Google Cloud Platform (GCP) and says sales of TPU systems were "a meaningful contributor". Cloud operating income rose to $11.1 billion from $3.6 billion. Our earlier piece on Google's TPUs coming to Oracle Cloud looks at that chip business.

The release puts capital expenditure for the quarter at $51.4 billion, against $42.3 billion of operating cash. That leaves free cash flow at minus $9.1 billion, after minus $5.9 billion in the second quarter.

How the market read it

CNBC reported that Microsoft shares rose about 4% in extended trading and that Alphabet fell more than 10%. Alphabet's revenue and adjusted earnings per share missed LSEG estimates, the first such double miss in nearly four years, according to CNBC. CNBC said Google Cloud beat the $28.7 billion analysts expected.

Why it matters

"We are working hard to bring more capacity online to meet this long-term demand," Alphabet chief executive Sundar Pichai said in his prepared remarks. For buyers, the difference is how each company funds its build-out. Microsoft is still paying for its build-out from operating cash. Alphabet is now spending more than it earns, and long-term debt reached $125.1 billion, CNBC reports. Enterprises negotiating multi-year cloud commitments should expect both companies to push for long contracts that justify that capex.

Sources and scope

Figures are from Microsoft's FY27 Q1 release and Alphabet's Q3 2026 release, both dated 28 October 2026. Consensus figures and share moves are from CNBC on Microsoft, CNBC on Alphabet. The Pichai quote is from his prepared remarks. The free cash flow calculation and buyer guidance are ByteNib editorial analysis.

Drafted with AI assistance and reviewed by the editor before publication.

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