Microsoft and Oracle gain as investors scrutinise cash behind AI spending
Wednesday’s trading drew a distinction between companies seen as able to fund AI expansion and those facing questions about its cost.
Microsoft and Oracle shares gained while Alphabet fell in US trading on Wednesday, 28 October, as investors weighed whether major technology companies can fund their AI expansion with cash from their businesses, according to Reuters. The split puts financing and returns at the centre of the market’s response to heavy spending on computing capacity.
Microsoft rose more than 3% in after-hours trading, while Alphabet dropped nearly 10%, Reuters reported. Oracle finished the regular session almost 11% higher after saying it planned to limit external financing and expected its cash flow to turn positive. Those moves reflected different market reactions to the companies’ reported ability to pay for further expansion.
Why Alphabet’s cash spending drew scrutiny
Reuters linked Alphabet’s decline to its cash burn and slower growth in Google Search. The slower growth raised concern that competition could weaken the business that helps pay for Alphabet’s AI investment. The report described investors as demanding clearer evidence that growth from new computing capacity can finance the next round of spending, after previously rewarding aggressive investment in that capacity.
Meta had offered another example the previous week: better-than-expected revenue growth and an upbeat outlook were overshadowed by its cash burn, Reuters reported. The contrast with Oracle’s financing plan shows why revenue growth alone may leave investors focused on how much cash an AI build-out consumes.
The wider question over AI investment returns
Ahead of the results, Hindustan Times reported that investors were watching what Google, Microsoft and Amazon were spending on AI and what they could earn from it. It cited Bank of America strategist Savita Subramanian on whether income from AI services could justify rising costs. The newspaper also reported, citing Yahoo Finance, that estimates for major cloud companies’ 2027 capital spending had increased by nearly 90% since the start of 2026.
The pressure to account for AI spending reaches customers as well as the companies building the infrastructure. TechCrunch reported that Anthropic announced tools on Wednesday that let business customers examine a team’s activity, output, costs and workflow problems over a selected period. The reports use internal analytics and employee surveys and are intended to help customers assess what they get for their token spending. Anthropic said the data would not be used for model training by default.
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Sources and context
- Cash is king as investors draw new battle lines in AI spending boomReuters, republished by CNA
- Google, Microsoft, Amazon face investor pressure to justify massive AI spending as earnings loomHindustan Times
- Anthropic just launched tools to show companies what their AI spending is buyingTechCrunch
AI-assisted article checked against the listed sources. NewsJaws did not conduct interviews or attend the reported events.