Microsoft reported strong fiscal second-quarter 2026 earnings, with revenues of $81.3 billion, up 17% year over year, and operating income of $38.3 billion. However, a 66% jump in capital expenditure to $37.5 billion raised investor concerns. Microsoft Cloud revenues crossed $50 billion, with Azure and other cloud services growing 39%.

Amazon and Alphabet are also facing significant capital expenditure challenges. Amazon expects $200 billion in capex for 2026, while Alphabet projects $175 billion to $185 billion. Both companies are focusing on AI and cloud infrastructure, with Amazon’s AWS revenues reaching $35.6 billion in Q4 2025 and Google Cloud revenues surging 48%.

Microsoft’s stock performance has declined by 21.2% in the past six months, outperforming the industry but underperforming the sector. The stock is trading at a forward 12-month Price/Sales ratio of 8.25X and has a Value Score of D. The Zacks Consensus Estimate for fiscal 2026 earnings is $16.97 per share, indicating 24.41% year-over-year growth.

Read more at Nasdaq: Is MSFT Stock Vulnerable to Rising Capex Pressure From AI Spending?