Executive Summary: Capex Has Become a Financing Story
The four largest U.S. hyperscalers spent $165.1 billion on property and equipment in calendar Q2 2026, almost double the $88.2 billion of Q2 2025. Their combined 2026 guidance sits at roughly $720 to $745 billion, against about $410 billion for 2025, a baseline taken from secondary trackers that we did not re-derive. NMSC’s framework for reading these numbers is: reported capex = cash spend + lease treatment + price inflation, and its sustainability = operating cash flow + debt and equity access.
The ranking depends on the definition. Amazon guides highest at about $220 billion, then Alphabet at $195 to $205 billion, Microsoft at about $175 billion and Meta at $130 to $145 billion. Microsoft’s figure fell from about $190 billion because more future data-centre leases will be classed as operating rather than finance leases, which sit outside capex. Its CFO said the spending expectation was otherwise unchanged (CFO Dive, secondary).
Cash is now the constraint at three of the four. In Q2, cash capex was 115% of operating cash flow at Alphabet and 119% at Amazon, and 95% at Meta. Microsoft spent 65%. Long-term debt at Alphabet and Amazon has roughly doubled since December 2025, and Alphabet raised $49.6 billion of equity and convertible preferred in June.
Price, not only volume, is lifting the bill. Amazon attributed its $20 billion guidance raise to higher memory costs, according to call coverage. At the same time the Federal Reserve raised its target range in September and CPI inflation reached 3.7%.
NMSC Insight: the four companies are on course to spend about $730 billion this year, yet the guidance midpoints require second-half spend roughly 44% above the first half. Whether that is delivered depends on financing conditions as much as on demand, which is why the late-October results matter.
Why This Question Is Live in 2026
Guidance has been reset, funding has shifted toward debt and equity, and monetary policy has turned. The dated events below frame the Q2 2026 comparison.
April 2026 — Guidance baselines
Prior 2026 capex guides were about $190 billion at Microsoft, $180–190 billion at Alphabet, about $200 billion at Amazon and $125–145 billion at Meta. Meta’s prior range is stated in its own release; the others come from call coverage.
22–30 July 2026 — Q2 results
Alphabet reported on 22 July, Microsoft and Meta on 29 July, and Amazon’s call followed on 30 July. Alphabet raised guidance to $195–205 billion and Amazon to about $220 billion.
June 2026 — Alphabet raises equity
Alphabet raised net proceeds of $49.6 billion from common stock and mandatory convertible preferred stock, and $20.3 billion from senior notes in Q2, and repurchased no stock.
16 September 2026 — Fed raises rates
The FOMC raised the target range by 25 basis points to 3.75%–4.00% in a 12–0 vote, calling capital investment robust and inflation elevated.
30 September 2026 — GDP revised up
BEA’s third estimate put Q2 real GDP growth at 2.2%, up 0.7 point, with nonresidential structures led by data centres cited in the investment revision.
14 October 2026 — CPI re-accelerates
Headline CPI reached 3.7% year on year in September from 3.4% in August, with energy up 20.4% and electricity up 4.4%.
21 October 2026 — Meta Q3 results
Meta will report after the market close, with its call at 4:30 p.m. ET. Alphabet, Microsoft and Amazon are expected around 28–29 October, which is not confirmed.
2026 Hyperscaler Capex Index
Capex is reported on different bases and funded from different sources. The blocks below separate verified company-filing data from guidance that rests on call coverage.
Q2 2026 CASH CAPEX: COMPANY FILINGS
Cash capex — $165B in a quarter, +87% year on year
$165.1B
Big-4 purchases of P&E, Q2 2026
+100%
Alphabet YoY, fastest of the four
$54.2B
Amazon gross, largest in dollars
Microsoft’s April–June quarter (FY26 Q4) is treated as calendar Q2. Microsoft was up 110%, Alphabet 100%, Meta 82% and Amazon 68% (NextMSC calculation from cash-flow statements). All four rows use the purchases-of-property-and-equipment line, the only basis that is strictly comparable.
2026 GUIDANCE: MIXED PRIMARY AND SECONDARY
Guidance — $720B to $745B, raised $22.5B at the midpoint
$732.5B
Combined midpoint
+$22.5B
Change vs April midpoint of $710B
~44%
H2 above H1 to hit the midpoints
Only Meta prints guidance in its release. Microsoft, Alphabet and Amazon guidance comes from earnings calls as reported by trade press and should be checked against transcripts. H1 actuals use each company’s own headline basis, so they mix cash and lease definitions; the H2 column is NextMSC arithmetic, not company guidance.
FUNDING: BALANCE SHEETS AND CASH FLOW
Funding — Microsoft self-funds, the other three borrow
+111%
Alphabet long-term debt since Dec 2025
+96%
Amazon long-term debt since Dec 2025
−23%
Microsoft long-term debt vs Jun 2025
Comparison dates differ: Microsoft is measured against 30 June 2025 and the other three against 31 December 2025. Meta’s long-term debt rose 42% to $83.7 billion, including $24.9 billion of net issuance in Q2.
Figure 1. Cash Capex by Company, Q2 2025 vs Q2 2026, U.S. Dollars Billion
USD billion, cash purchases of property and equipment. Blue = Q2 2026; grey = Q2 2025.
Source: Microsoft, Alphabet, Amazon and Meta filings and releases and NextMSC analysis.
nextmsc.com/industry-deep-dive/hyperscaler-capex-comparison-2026
Amazon spends the most in dollars but the least as a share of revenue at 27%, because it also runs a very large retail and logistics business. Meta spends the largest share at 49.5%, with Microsoft at 39.8% and Alphabet at 37.5% (NextMSC calculation).
Why the Four Numbers Are Not Like-for-Like
Each company’s headline capex uses a different yardstick, so ranking them from press releases alone can mislead. NMSC uses the cash-flow statement line for every company and shows the headline basis alongside it.
| Company | Cash P&E purchases, Q2 2026 | Company headline basis | Headline vs cash |
|---|---|---|---|
| Microsoft (FY26 Q4) | $35.8B | Adds finance leases: about $41B (secondary) | About +$5B |
| Alphabet | $44.9B | Equals purchases of P&E | No difference |
| Amazon | $54.2B gross | Net of sale proceeds and incentives: $53.1B | −$1.1B |
| Meta | $30.1B | Adds finance-lease principal: $31.08B | +$1.0B |
Fiscal calendars also differ: Microsoft’s year ends on 30 June, so its April–June quarter is treated as calendar Q2. Amazon’s net figure is derived from its filing as $54,208 million less $1,132 million of sale proceeds and incentives, which matches the $53.1 billion quoted on its call.
Figure 2. Capex as a Share of Operating Cash Flow, Q2 2026, Percent
Cash purchases of property and equipment ÷ net cash from operating activities, Q2 2026. Above 100% means capex exceeded operating cash flow.
Source: Microsoft, Alphabet, Amazon and Meta filings and releases and NextMSC analysis.
nextmsc.com/industry-deep-dive/hyperscaler-capex-comparison-2026
Simple free cash flow, operating cash flow less cash capex, was −$5.9 billion at Alphabet (as reported), −$8.8 billion at Amazon on a gross basis, +$1.7 billion at Meta on this simple basis and +$19.6 billion at Microsoft. Meta’s own reported figure is $784 million because it also deducts $962 million of finance-lease principal, and Amazon’s own trailing-twelve-month figure of about −$7.6 billion nets sale proceeds.
2026 Guidance and What It Implies for H2
Guidance has risen at three of the four companies and fallen at one for accounting reasons. The second half has to run well above the first to reach the midpoints.
| Company | 2026 guide ($B) | Midpoint | April midpoint | Change | H1 2026 actual | Implied H2 at midpoint |
|---|---|---|---|---|---|---|
| Microsoft | 175 | 175.0 | 190 | -15.0 | 72.9 | 102.1 |
| Alphabet | 195–205 | 200.0 | 185 | +15.0 | 80.6 | 119.4 |
| Amazon | 220 | 220.0 | 200 | +20.0 | 96.3 | 123.7 |
| Meta | 130–145 | 137.5 | 135 | +2.5 | 50.9 | 86.6 |
| Total | 720–745 | 732.5 | 710.0 | +22.5 | 300.7 | 431.8 |
Figure 3. 2026 Guidance Midpoint vs April Midpoint, U.S. Dollars Billion
USD billion, calendar 2026. Microsoft’s fall reflects lease classification, not lower planned spending (CFO Dive, secondary).
Source: Meta, CFO Dive, MarketBeat and NextMSC analysis.
nextmsc.com/industry-deep-dive/hyperscaler-capex-comparison-2026
H1 actuals mix definitions: Alphabet is cash purchases of $80.6 billion, Amazon is $98.4 billion gross less $2.1 billion of proceeds, Meta is $49.1 billion plus $1.8 billion of finance-lease principal, and Microsoft’s $72.9 billion is derived from secondary quarterly figures that include finance leases. A reported fiscal Q1 FY27 guide above $50 billion for Microsoft, including finance leases, would fit the second-half pattern, but we could not confirm it in the coverage we re-opened.
The 4 Pillars of the Hyperscaler Capex Cycle
NMSC’s assessment separates how much is spent, how it is funded, what demand supports it and how much of it is price. Together they distinguish a headline dollar figure from capacity that is financed and contracted.
PILLAR 1
Spend — The Step-Up Is Accelerating
Alphabet’s five-quarter run shows the step-up most clearly: $22.4 billion in Q2 2025, then $24.0 billion, $27.9 billion, $35.7 billion and $44.9 billion in Q2 2026. The Q3 and Q4 2025 values are supplied and sum, with the two reported quarters, to the $132.4 billion trailing figure, but were not re-opened line by line.
Q1 2026 values for Amazon and Meta are derived: Amazon’s H1 purchases of $98.4 billion less Q2 gives $44.2 billion, and Meta’s H1 of $49.1 billion less Q2 gives $19.0 billion. That puts quarter-on-quarter growth at 23% for Amazon, 26% for Alphabet and 59% for Meta (NextMSC calculation).
PILLAR 2
Funding — Operating Cash Flow No Longer Covers the Build
Microsoft is the outlier: it funds the build from operating cash flow and repaid debt during fiscal 2026. The other three use bond markets and, in Alphabet’s case, equity. That matters because the Fed has just raised rates, so the cost of the funding has gone up.
Property and equipment is growing fast on every balance sheet. Net P&E reached $446.0 billion at Amazon, $321.2 billion at Alphabet, $313.1 billion at Microsoft (up 53% from June 2025) and $225.7 billion at Meta.
PILLAR 3
Demand — Backlogs Justify the Build, With Caveats
Microsoft reported commercial remaining performance obligation of $678 billion, up 84%, with Azure and other cloud services up 43% and Microsoft Cloud revenue of $59.3 billion. Google Cloud revenue rose 82% to $24.8 billion with $8.8 billion of operating income, against $2.8 billion a year earlier. Amazon disclosed about $496 billion of unrecognised performance obligations, mainly AWS.
Two further signals come from call coverage and are secondary: a $514 billion Google Cloud backlog and AWS revenue of $42.2 billion, up 36.7%. Amazon’s CEO said on the call that demand would still exceed capacity in 2026 and into 2027 (MarketBeat, secondary). Backlog is contracted demand, not cash received, so it supports the build without removing the funding question.
PILLAR 4
Input Prices — Part of the Surge Is Price, Not Capacity
Amazon tied its $20 billion raise to higher memory costs, and a report on Microsoft’s call attributed about $25 billion of its earlier guide to higher component pricing; the latter is unverified in the sources we re-opened. NMSC’s memory shortage analysis covers the component side in detail.
Power is the other input. EIA’s all-sector average retail price was 14.15 cents per kWh for January to June 2026 against 13.27 a year earlier, about 7% higher (NextMSC calculation). EIA forecasts 2026 wholesale power at about $52 per MWh across 11 hubs, 11% above 2025, with PJM up 41%, and expects about $49 in 2027. The practical reading is that comparing dollars across quarters overstates the growth in compute actually installed.
Macro Backdrop: Rates, Inflation and Power
Capex is being committed into a tighter and more inflationary setting than a year ago. The indicators below are the ones that bear most directly on financing cost and input prices.
| Indicator | Latest | Period | Why it matters for capex |
|---|---|---|---|
| Real GDP growth | 2.2% annualised | Q2 2026, third estimate (30 Sep) | Revised up 0.7 point, with data-centre structures cited |
| Gross domestic purchases price index | 5.6% annualised | Q2 2026 | Broad price pressure raises equipment and construction cost |
| Fed funds target range | 3.75%–4.00% | 16 Sep 2026 | Higher financing cost for the three borrowers |
| CPI, all items | 3.7% YoY | Sep 2026 (3.4% in Aug) | Inflation has re-accelerated |
| CPI, energy / electricity | +20.4% / +4.4% YoY | Sep 2026 | Power is the main operating input |
| Private data-centre construction | $84.95B annual rate (secondary) | Aug 2026, +73% YoY | Building work only; excludes servers and racks |
| U.S. electricity use | +4% YoY | Q3 2026 estimate (EIA) | Commercial use, which includes data centres, +5% |
The Fed’s September statement describes capital investment as robust and inflation as elevated. The next BEA release, the Q3 GDP advance estimate, is due on 29 October 2026, the same week as most hyperscaler earnings. The private data-centre construction figure of $84.95 billion, against $49.05 billion a year earlier, was read through press summaries of the Census table and could not be re-opened.
Company Comparison Matrix
Capex level, cash coverage, funding and demand are four separate dimensions. The matrix sets the companies against each other on the sourced indicators. It is an analytical framework, not a ranking.
| Company | Q2 2026 cash capex | Capex / op. cash flow | Funding | Demand signal | 2026 guide |
|---|---|---|---|---|---|
| Microsoft | $35.8B (+110%) | 65% | Self-funded; long-term debt $31.1B | Commercial RPO $678B, Azure +43% | ~$175B (secondary) |
| Alphabet | $44.9B (+100%) | 115% | Debt $98.2B; $49.6B equity; no buybacks in Q2 | Cloud revenue +82%; backlog $514B (secondary) | $195–205B (secondary) |
| Amazon | $54.2B (+68%) | 119% | Debt $128.9B; $67.0B proceeds in H1 | Obligations $496B; AWS +36.7% (secondary) | ~$220B (secondary) |
| Meta | $30.1B (+82%) | 95% | Debt $83.7B; $24.9B net issuance in Q2 | Revenue +28%; impressions +14%, price per ad +12% | $130–145B (company release) |
Company-Level Case Studies
Rather than repeat the table, NMSC picks four contrasting positions to show how spend, funding and demand interact. The full records are in the Dataset Explorer below.
Microsoft
SELF-FUNDED + DEMAND-CONSTRAINED
Q4 FY26 revenue was $90.0 billion, up 18%, and operating cash flow was $55.4 billion, leaving about $19.6 billion after cash capex of $35.8 billion. Fiscal-year additions to property and equipment reached $115.9 billion against $64.6 billion a year earlier. Long-term debt fell to $31.1 billion from $40.2 billion, though the current portion rose to $9.2 billion from $3.0 billion.
Alphabet
FASTEST CAPEX GROWTH + NEGATIVE FREE CASH FLOW
Q2 revenue was $119.8 billion, up 24%, and Google Cloud revenue rose 82% to $24.8 billion. Purchases of property and equipment were $44.9 billion against $39.1 billion of operating cash flow, leaving free cash flow of −$5.9 billion. In June it raised $49.6 billion of equity and convertible preferred and $20.3 billion of senior notes, and bought back no stock.
Amazon
BIGGEST ABSOLUTE SPENDER + DEBT-FUNDED
Q2 net sales were $200.6 billion, up about 20%, and gross purchases of property and equipment were $54.2 billion against $45.4 billion of operating cash flow. Long-term debt rose to $128.9 billion from $65.6 billion at year-end, and the cash-flow statement shows $67.0 billion of long-term debt proceeds in H1. Management said on the call that capacity would stay short of demand through 2027 (secondary).
Meta
HIGHEST CAPEX INTENSITY + THIN CASH BUFFER
Q2 revenue was $60.8 billion, up 28%, but operating margin fell to 31% from 43% as costs grew 55%, including $2.4 billion of legal charges and $1.18 billion of severance. Capex including finance-lease principal was $31.08 billion against $31.86 billion of operating cash flow, and free cash flow was just $784 million. Meta issued $24.9 billion of long-term debt, and narrowed its guide upward to $130–145 billion.
What to Watch: Event Matrix
The next few weeks bring a dense set of dated events. The matrix pairs each with what to check.
| Event | Date | Status | What to check |
|---|---|---|---|
| Meta Q3 2026 results | 21 Oct 2026 | Confirmed by Meta | Capex guide, financing, finance-lease treatment |
| Alphabet, Microsoft, Amazon Q3 results | About 28–29 Oct 2026 | Expected, not confirmed | Does guidance rise again, and how much is price vs capacity |
| BEA Q3 GDP advance estimate | 29 Oct 2026 | Scheduled by BEA | Investment contribution, data-centre structures |
| BLS October CPI; EIA Short-Term Energy Outlook | 10 Nov 2026 | Scheduled | Energy and electricity inflation, wholesale power forecast |
| Lease classification after Microsoft’s change | Ongoing | Accounting | Whether peers move leases outside capex |
Methodology and Data Limitations
This analysis compares the cash capex of Microsoft, Alphabet, Amazon and Meta for calendar Q2 2026 on one definition, and sets it against guidance, funding, demand and input-price indicators. It is not a forecast of company spending and not investment advice.
Methodology
- Company financials come from Microsoft’s 8-K Exhibit 99.1, Alphabet’s earnings release, Amazon’s Form 10-Q and Meta’s earnings release, all re-opened for this edition.
- Macro data come from BEA, the Federal Reserve, BLS and EIA pages, also re-opened.
- Ratios, growth rates, totals, derived Q1 values for Amazon and Meta, and implied H2 spend are NextMSC calculations on the cited inputs.
- Microsoft’s April–June quarter is treated as calendar Q2.
Data Limitations
- Q3 2026 results are not out; dates for Alphabet, Microsoft and Amazon are expected, not confirmed.
- Guidance for Microsoft, Alphabet and Amazon comes from call coverage rather than releases and should be checked against transcripts.
- The 2025 baseline of about $410 billion, the $514 billion Google Cloud backlog, AWS revenue, the Census data-centre figure and the three component-price series are secondary or unverified and are labelled so.
- EIA publishes new monthly editions, so sector price readings may have been superseded.
- H1 actuals and finance-lease amounts for Microsoft are derived from secondary quarterly commentary.
Source: SEC filings, company investor-relations releases, BEA, the Federal Reserve, BLS and EIA and NextMSC analysis.
nextmsc.com/industry-deep-dive/hyperscaler-capex-comparison-2026
Key Findings
Capex nearly doubled in a year
Big-4 cash capex was $165.1 billion in Q2 2026, up 87% from $88.2 billion, with Alphabet up 100% and Microsoft up 110%.
Definitions change the ranking
Headline capex adds finance leases at Microsoft and Meta and nets proceeds at Amazon, so the cash-flow line is the only like-for-like basis.
Three of four now outspend or match cash flow
Capex was 115% of operating cash flow at Alphabet, 119% at Amazon and 95% at Meta, while Microsoft was at 65%.
The second half must run hotter
The $732.5 billion guidance midpoint implies about $432 billion in H2, roughly 44% above H1 at company-defined capex.
Debt and equity are filling the gap
Alphabet’s long-term debt rose 111%, Amazon’s 96% and Meta’s 42% since December 2025, just as the Fed raised rates.
Part of the surge is price
Amazon tied its $20 billion raise to memory costs, and electricity prices are about 7% higher year on year, so dollar growth overstates installed capacity growth.
Dataset Explorer
Filter the full 108-record dataset compiled for this report: cash capex, guidance, cash intensity, funding, demand signals, macro, power and component prices. Rows that rest on call coverage, supplied values or unconfirmed figures are tagged in the item text.
| Category | Item | Value / Change | Date |
|---|
Conclusion
Hyperscaler capex has moved from a growth story to a financing and pricing story. The four companies are on course to spend roughly $730 billion this year, with the second half heavier than the first. Microsoft is funding its build from operating cash flow, while Alphabet, Amazon and Meta lean increasingly on debt and equity just as the Fed has started tightening again.
Part of the rise reflects higher memory and power prices rather than extra capacity, and the four headline figures are not like-for-like. The late-October results will show whether guidance keeps climbing, how much of any increase is price versus capacity, and how leases are classified after Microsoft’s change. NextMSC’s framework of cash spend, lease treatment, price inflation and funding is a starting point for that view, not a forecast. This tracker will be refreshed after each earnings round.
About the Author
Liza Phukan
— Liza Phukan is Research Associate at Next Move Strategy Consulting, where she has covered emerging industries and market research across sectors for 3.5 years. Her work includes analyzing industry developments, validating market data, and developing structured business content from research findings. She uses secondary research and data-validation practices to turn complex market information into clear decision-useful market analysis for business audiences and support report development and B2B.
About the Reviewer
Debashree Dey
— Debashree Dey is Assistant Manager at Next Move Strategy Consulting, where she supports cross-vertical market content and communications across diverse industries for 6 years. Her professional background includes senior content writing, communications, and published manuscript authorship, with experience developing audience-focused business narratives and maintaining clear, consistent messaging. Her role supports research-led content development and editorial quality across NextMSC publications.
Data cut-off: October 18, 2026 • Corrections and source challenges: Contact NMSC Research.