Microsoft and Amazon Won the AI Spending Week. Alphabet, Meta, and Oracle Didn't. Now What?

Written by Anders Bylund for The Motley Fool->

Microsoft and Amazon rose after earnings, while Alphabet, Meta, and Oracle fell, and capex plans explain the split better than earnings did.

This overview is the first piece in a series that will track where the money comes from, which balance sheets can sustain it, and which spending plans hold up best.

The five hyperscalers' full-year AI spending guidance ranges from about $70 billion at Oracle to roughly $220 billion at Amazon, though those figures aren't strictly comparable.

The hyperscaler giants reported quarterly results over the last few weeks. Despite consistently impressive earnings and revenues, the market reactions were mixed. Capital expenditure (capex) planning was a better explanation for the stock moves than the usual earnings and revenue jumps.

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How different are these tech titans' AI investments, though? Their expenses look similar at first glance, but where will the money come from? Who can sustain this pace, and who is quietly bending the balance sheet, or the cash flow statement, to make it look easier than it is?

So I'm taking a deep look at the hyperscaler data center investments. Keep an eye on this space for further analysis and thematic comparisons.

I'll confess a selfish motive too. Half the reason to lay all five side by side is that I expect to understand the whole AI build-out story much better by the end than I did at the start. Learn it with me, starting with a simple overview of the basic facts.

Data source: Company filings and earnings calls.

There are a few asterisks to this handy table. Apples to apples? Sometimes, the best I can do is a sweet Honeycrisp to a tart Bartlett pear. They're in neighboring orchards, but they definitely don't crunch the same.

Alphabet, Meta, and Amazon sync their fiscal years with the standard calendar on your wall. When they refer to the current or next year, it's pretty clear what period they're talking about.

The others are more complicated. Oracle's fiscal year ends on May 31 and Microsoft's on June 30. It's important to note whether these companies are projecting fiscal-year or calendar-year results. You may have seen a larger estimate of roughly $255 billion for Microsoft's capex plans, but that's for the 2027 fiscal year. The basic calendar year is better for apples-to-apples comparisons. Furthermore, that's the only period for which Microsoft's management actually gave a capital spending target in the Q4 2026 earnings call.

Oracle's ~$70 billion is net of customer prepayments; gross guidance is $90 billion to $95 billion. The smaller figure doesn't indicate a smaller build. It's cash Oracle's AI computing customers pay up front for their long-term contracts.

Meta's $130 billion to $145 billion specifically includes principal payments on finance leases, so it isn't strictly comparable to peers that report property and equipment purchases. By the way, Microsoft is shifting more of its future data center leases from finance to operating, which moves some of the costs from cash flow considerations to operating expenses.

At the same time, Amazon's global e-commerce system plays a significant part in the company's capital expenses. A good chunk of Amazon's expenses are for warehouses and delivery gear, not memory chips and data center cooling. Everyone has non-AI cash costs, but Amazon's are large.

Those are the headline figures you see all over the place, including clarifications that often aren't included. It's the concrete foundation for the real work of my little series. Assuming I don't run out of coffee and motivation, here's the plan:

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Anders Bylund has positions in Alphabet and Amazon. The Motley Fool has positions in and recommends Alphabet, Amazon, Meta Platforms, Microsoft, and Oracle. The Motley Fool has a disclosure policy.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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