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Alphabet and Amazon face market scrutiny over AI spending and cash flow
Major technology companies are facing intense investor scrutiny as the high costs of artificial intelligence investment impact financial stability. Alphabet reported a significant decline in market value, losing approximately $482 billion in a single day following third-quarter results. The company reported its first instance in four years where both revenue and earnings per share missed market expectations. A primary driver was a 114% year-over-year increase in capital expenditures, which led to a negative free cash flow of $9.07 billion.
Similarly, Amazon reported disappointing third-quarter results, with its stock dropping over 6% in extended trading. The company saw a significant swing to negative free cash flow for the trailing twelve-month period, attributed largely to increased spending on property and equipment for AI. While Amazon's AWS segment showed strong growth, rising capital expenditures have raised questions regarding the return on investment for these massive outlays.
Other firms are also adjusting their approach to AI costs. Uber implemented monthly spending limits per employee for AI coding tools after exhausting its annual budget within four months. Microsoft and Meta have also taken steps to manage token consumption and internal spending more strictly.
Entities
Alexander Bradley · Alphabet Inc. · Amazon.com, Inc. · Christiane Ohlgart · First Solar · Fortinet · India · Ken Xie · Malaysia · Mark Widmar · Michael Xie · Microsoft Corporation
Claims
What the coverage asserts, and how many sources carry each claim.
- [● 2 SOURCES] Alphabet shares fell 12 percent during the regular session on October 29. www.atinitonews.com
- [● 4 SOURCES] AWS revenue grew 39.3 percent year-over-year in the third quarter. alphabetastock.com · newspaceeconomy.ca · cryptobriefing.com
- [● 2 SOURCES] Amazon's third-quarter revenue was $201.9 billion. alphabetastock.com · cryptobriefing.com
- [○ 1 SOURCE] Amazon's third-quarter diluted earnings per share were $1.89. alphabetastock.com
- [● 2 SOURCES] Amazon expects capital expenditures to reach approximately $220 billion for 2026. www.atinitonews.com · cryptobriefing.com
- [○ 1 SOURCE] Amazon's third-quarter operating income was $28.1 billion. alphabetastock.com
- [● 4 SOURCES] Amazon's trailing twelve-month free cash flow was negative $42.4 billion. www.atinitonews.com · alphabetastock.com · newspaceeconomy.ca · cryptobriefing.com
- [○ 1 SOURCE] AWS could become a trillion-dollar revenue business within five to ten years.
- [○ 1 SOURCE] Uber introduced a $1,500 monthly spending limit per employee for AI coding tools. www.businesstoday.in
- [○ 1 SOURCE] Microsoft reduced its internal spending on Anthropic's Claude by more than a third. www.businesstoday.in
- [○ 1 SOURCE] Alphabet's stock fell by more than 12% in a single day. www.edigest.hk
- [○ 1 SOURCE] Alphabet's third-quarter capital expenditures increased by 114% year-over-year. www.edigest.hk