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Google and Microsoft report fast cloud growth, but Alphabet shares fall on cash flow

Alphabet says quarterly revenue rose 25% to $127.6 billion, and Google Cloud revenue rose 103% to $30.7 billion. CEO Sundar Pichai says search query growth is the highest in five years and credits AI. YouTube ad revenue grew 9% to $11.2 billion, below estimates, Variety reports. CNBC reports Alphabet had negative free cash flow of $9.07 billion, worse than expected, and its shares fell more than 10%. Microsoft says revenue rose 19% to $92.3 billion, with Azure cloud revenue up 48% to $33.2 billion, the first time it has given Azure's revenue in dollars. A filing shows Microsoft made $10 billion from OpenAI in the quarter, almost 11% of its revenue, TechCrunch reports. Reuters reports Microsoft spent $45.2 billion on equipment and buildings, below its own $50 billion forecast.

Why it matters: Demand for AI cloud computing is still growing fast. Investors are now watching how much it costs to build, not just how much revenue it brings in.
Earnings reportsThe Verge