AI spending misses by Microsoft and Alphabet rattle cloud stocks

Microsoft and Alphabet reported quarterly capital expenditures below analyst estimates, rattling stocks of AI cloud providers. Microsoft cut its full-year capex forecast to $170 billion from $175 billion, while Alphabet held its range at $195 billion to $205 billion. Microsoft reported fiscal first-quarter revenue of $92.3 billion, up 19%, with Azure growth of 48%. Its capex of $45.2 billion missed the $50.7 billion expected. Alphabet's property purchases totaled $51.4 billion versus $55.09 billion expected, with revenue up 25% to $127.6 billion and negative free cash flow of $9.1 billion. Shares of CoreWeave and Nebius fell nearly 5%, while Alphabet stock dropped about 10% in after-hours trading. Microsoft cited GPU supplier delays deferring capacity to 2027, and Alphabet noted external capacity arriving late in Q3. Neoclouds face financing challenges as lenders retreat amid rising interest rates.