# The four hyperscalers spent about $207 billion in a quarter, and supply set the limit

URL: https://www.thedeepfeed.ai/posts/2026-10-29-hyperscaler-capex-hits-supply/
Category: Business
Published: 2026-10-29
Author: the-deep-feed
Tags: capex, microsoft, alphabet, google-cloud, meta, amazon, aws, infrastructure, earnings
Kind: news

> Microsoft, Alphabet, Meta and Amazon reported roughly $207 billion of third-quarter capital spending between October 21 and 29, and the binding constraint they described was supply, from delayed third-party capacity to chips, not any reluctance to spend.

## TL;DR

- Third-quarter capital spending: **Amazon $75.9B** (cash), **Alphabet $51.4B**, **Microsoft $45.2B** and **Meta $34.9B**, about **$207B** combined on slightly different definitions.
- Microsoft's capex came in where it did 'as some third-party capacity deliveries we expected in Q1 were delayed,' and it now guides to about **$170B** for the calendar year.
- Alphabet held 2026 at **$195-205B**, Amazon at about **$220B**, and Meta narrowed to **$135-145B**. Together with Microsoft, that is roughly **$720-740B** for 2026.
- Reported backlogs are larger than a year of spending: Microsoft commercial RPO **$677B**, AWS **$578B**, Google Cloud **$561B**.

Microsoft, Alphabet, Meta and Amazon spent about $207 billion on capital projects in the quarter to September 30, and none of them described weak demand. The limit they described was supply: Microsoft spent less than planned because third-party capacity arrived late, Alphabet began renting outside compute, and Amazon's chief executive said customers take capacity almost as fast as it is installed.

Meta reported on October 21, Microsoft and Alphabet on October 28, and Amazon on October 29. The figures below come from each company's release or 8-K exhibit, with call quotes from the published transcripts.

# The quarter, company by company

The four companies define capital spending slightly differently, so the combined figure is approximate.

| Company | Q3 capex | 2026 outlook | Cloud growth | Backlog / RPO |
|---|---|---|---|---|
| Amazon | $75.9B cash capex | ~$220B, unchanged | AWS +39% | $578B |
| Alphabet | $51.4B purchases of property and equipment | $195-205B, unchanged | Google Cloud +103% | $561B |
| Microsoft | $45.2B incl. $7.4B finance leases | ~$170B calendar year | Azure +48% | $677B commercial RPO |
| Meta | $34.91B incl. finance-lease principal | $135-145B, narrowed from $130-145B | n/a | n/a |

[Amazon's release](https://www.sec.gov/Archives/edgar/data/1018724/000101872426000038/amzn-20260930xex991.htm) repeats: "We continue to expect 2026 cash capital expenditures to be approximately $220 billion." [Alphabet's](https://www.sec.gov/Archives/edgar/data/1652044/000165204426000080/googexhibit991q32026.htm) shows purchases of property and equipment of $51.4 billion, against $24.0 billion a year earlier, and Google Cloud revenue of $30.7 billion, up 103%. [Meta's](https://www.sec.gov/Archives/edgar/data/1326801/000162828026066700/meta-09302026xexhibit991.htm) narrowed its 2026 outlook to "$135-145 billion," up from "$130-145 billion."

# Microsoft spent less because it could not get capacity

Microsoft's number is the most revealing because it came in under plan for a supply reason. On the [earnings call](https://www.microsoft.com/en-us/investor/events/fy-2027/earnings-fy-2027-q1), chief financial officer Amy Hood said: "Capital expenditures were $45.2 billion, as some third-party capacity deliveries we expected in Q1 were delayed." She said the company expects more than $50 billion in the December quarter, and "for the calendar year, spend should be approximately $170 billion due to the 3P capacity delays noted earlier."

The delayed deliveries are capacity Microsoft rents from outside providers, which she described as "3P GPU as a service contracts that have been delayed to H2." Demand is not the problem: "Customer demand continues to exceed available supply," Hood said. Azure revenue grew 48%, and commercial remaining performance obligation rose 73% to $677 billion, according to the [release](https://www.microsoft.com/en-us/investor/earnings/fy-2027-q1/press-release-webcast). Roughly three quarters of the capex went to "short-lived assets, primarily CPUs and GPUs," including "higher memory and storage costs." [Fortune](https://fortune.com/2026/10/28/microsofts-cloud-growth-accelerates-and-so-too-does-the-spending/) quoted her summary: "We still have demand that exceeds supply."

# Alphabet rents, Amazon installs as fast as it can

Alphabet held its full-year range, but its call showed the same constraint. CFO Anat Ashkenazi said "our full year 2026 CapEx guidance range of $195 billion to $205 billion remain unchanged," that capex will "increase significantly in 2027," and that "we started utilizing third-party compute capacity at the end of Q3 and will ramp usage in Q4," according to the [Investing.com transcript](https://www.investing.com/news/transcripts/earnings-call-transcript-alphabet-q3-2026-profit-miss-sparks-10-afterhours-drop-93CH-4981037). Google Cloud chief Thomas Kurian was blunter: "we could obviously serve a lot more demand with capacity." The release adds that "TPU systems sales were also a meaningful contributor to revenue growth." Investors weighed the cost. [Fortune](https://fortune.com/2026/10/28/alphabet-google-stock-drops-cloud-revenue-doubles-free-cash-flow-negative/) reported free cash flow of negative $9.1 billion and a share drop of more than 11% after hours.

At Amazon, Andy Jassy described the queue directly on the [call](https://www.investing.com/news/transcripts/earnings-call-transcript-amazon-q3-2026-misses-eps-as-shares-fall-after-hours-93CH-4985489): "almost as fast as we install capacity, customers are gobbling it up." He named the bottleneck too: "There's only so many chips that provider can provide each year." AWS revenue rose 39% to $46.0 billion, backlog reached $578 billion, and Amazon said it expects "to spend meaningfully more in 2027." [TechCrunch](https://techcrunch.com/2026/10/29/aws-will-be-a-1t-business-jassy-says-but-first-it-will-spend-big/) led with Jassy's forecast that AWS would become a $1 trillion business, after the spending.

Meta, which has no cloud business to sell, described the constraint as a launch decision. On its call, Mark Zuckerberg said of its Muse assistant, as quoted by [Fortune](https://fortune.com/2026/10/21/meta-q3-earnings-mark-zuckerberg-capex-muse/): "Because this is a compute-intensive service to run, we have not launched it globally yet."

# Where the limit sits now

Added up, the 2026 outlooks come to roughly $720 billion to $740 billion: Microsoft's approximately $170 billion for the calendar year, Alphabet's $195-205 billion, Meta's $135-145 billion and Amazon's approximately $220 billion. The three cloud companies' reported backlogs each exceed a full year of that company's spending.

That changes what to watch. When demand was the question, the key number was capex guidance. When supply is the question, the key numbers are delivery dates: third-party GPU contracts slipping into the second half, chip allocations, power hookups and memory prices. Microsoft's quarter shows that a lower capex number can now mean less capacity was available, not that less was wanted. The suppliers have noticed. This week Broadcom, Nvidia and AMD each [put their own balance sheets behind customers' purchases](/posts/2026-10-27-chipmakers-underwrite-their-customers/).

## Sources

- [Microsoft — FY27 Q1 earnings press release (Oct 28, 2026)](https://www.microsoft.com/en-us/investor/earnings/fy-2027-q1/press-release-webcast)
- [Microsoft — FY27 Q1 earnings call transcript (Oct 28, 2026)](https://www.microsoft.com/en-us/investor/events/fy-2027/earnings-fy-2027-q1)
- [Fortune — Microsoft's cloud growth accelerates, and so too does the spending (Oct 28, 2026)](https://fortune.com/2026/10/28/microsofts-cloud-growth-accelerates-and-so-too-does-the-spending/)
- [SEC — Alphabet Q3 2026 results, Exhibit 99.1 (Oct 28, 2026)](https://www.sec.gov/Archives/edgar/data/1652044/000165204426000080/googexhibit991q32026.htm)
- [Investing.com — Alphabet Q3 2026 earnings call transcript (Oct 28, 2026)](https://www.investing.com/news/transcripts/earnings-call-transcript-alphabet-q3-2026-profit-miss-sparks-10-afterhours-drop-93CH-4981037)
- [Fortune — Alphabet's Google Cloud revenue doubles to $31 billion as cash flow stays deep red (Oct 28, 2026)](https://fortune.com/2026/10/28/alphabet-google-stock-drops-cloud-revenue-doubles-free-cash-flow-negative/)
- [SEC — Meta Q3 2026 results, Exhibit 99.1 (Oct 21, 2026)](https://www.sec.gov/Archives/edgar/data/1326801/000162828026066700/meta-09302026xexhibit991.htm)
- [Fortune — Meta's revenue surges to $64.6 billion, but settlements and AI spending squeeze profit (Oct 21, 2026)](https://fortune.com/2026/10/21/meta-q3-earnings-mark-zuckerberg-capex-muse/)
- [SEC — Amazon Q3 2026 results, Exhibit 99.1 (Oct 29, 2026)](https://www.sec.gov/Archives/edgar/data/1018724/000101872426000038/amzn-20260930xex991.htm)
- [Investing.com — Amazon Q3 2026 earnings call transcript (Oct 29, 2026)](https://www.investing.com/news/transcripts/earnings-call-transcript-amazon-q3-2026-misses-eps-as-shares-fall-after-hours-93CH-4985489)
- [TechCrunch — AWS will be a $1T business, Jassy says. But first, it will spend big. (Oct 29, 2026)](https://techcrunch.com/2026/10/29/aws-will-be-a-1t-business-jassy-says-but-first-it-will-spend-big/)

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