Nebius Shares Fall 4.7% as Microsoft Spending Diverges and Alphabet Cloud Growth Surges
Key Facts
Nebius shares fell 4.7% in morning trading on October 29, after a report that Microsoft’s quarterly capital spending came in below the average of analysts’ estimates. This put pressure on cloud infrastructure companies that track spending by their biggest customers, but the company attributed the gap to delays in capacity deliveries from third parties, not a change in spending plans. By contrast, Microsoft’s fiscal first-quarter results showed growth in its cloud business: Microsoft Cloud revenue rose 30% to $63.9 billion, while Azure revenue increased 48%. Free cash flow was $18.6 billion, exceeding Visible Alpha’s estimate of $8.54 billion. Microsoft shares rose more than 3% in after-hours trading on October 28, according to Reuters via Investing.com.
Elsewhere in the sector, Alphabet reported capital spending of $51.4 billion in the three months ended September 30, 2026, reflecting mainly investments in technical infrastructure, according to its filing with the U.S. Securities and Exchange Commission. Google Cloud posted record revenue of $30.7 billion, up 103% year over year in the third quarter. The company attributed the growth to strength in Google Cloud Platform’s AI infrastructure and enterprise solutions, along with core platform services and TPU system sales. This places cloud revenue expansion alongside major infrastructure investment over the same period. CEO Sundar Pichai said infrastructure and AI solutions are “key drivers of cloud growth,” and that customers see Alphabet as a leading provider amid strong demand.
Alphabet’s growth extended to advertising, with search and other advertising revenue rising 12% to $63.3 billion, while YouTube advertising revenue increased 9% to $11.2 billion in the third quarter. However, both increases fell short of some analysts’ expectations, according to the Associated Press. In after-hours trading on October 28, Alphabet shares fell more than 10% to $289.95, a move in extended trading rather than the daily closing price. The stock closed at $324.89 on October 28, then at $284.74 on October 29, according to EL7 data. The share decline coincided with results that included strong cloud growth, but advertising revenue did not meet some expectations.
These figures add to a results picture that combined cloud and advertising expansion with pressure on net income and earnings per share. The after-hours share move also separated strong cloud revenue from other elements of the results that investors were watching.
Alphabet’s chief financial officer said the company still expects capital expenditures to increase “significantly” in 2027. She added that she would provide further details on this outlook during the fourth-quarter earnings call, without specifying a date for the call in the open source. The guidance follows $51.4 billion in spending over the three months ended September 30, with investment focused mainly on technical infrastructure. The fourth-quarter call will be the next opportunity the company has identified to provide further details on its 2027 spending plans.