Big Tech spent 90% of its operating cash on capex and raised $358.6B

Amazon (Nasdaq: AMZN), Microsoft (Nasdaq: MSFT), Alphabet (Nasdaq: GOOGL) and Meta (Nasdaq: META) spent $610.8 billion of cash on property and equipment in the four quarters to September 2026, 90% of the $676.8 billion their operations brought in, by a SaasBuzz analysis of their filings. A year earlier, the same measure was 61%. Counting the $70.0 billion they paid shareholders in dividends and buybacks, the four spent $4.0 billion more than their operations produced, and over the same twelve months they raised $358.6 billion by selling bonds and stock.

The four now pay for the build-out with borrowed money, new shares and long leases as well as their own cash. Beyond their balance sheets, they have signed $988.0 billion of leases that have not yet started, 2.4 times the $410.2 billion of long-term debt they carried at the end of September. This week Meta priced $37.5 billion of stock offerings, and Microsoft began its first US high-grade bond sale since 2017, which Bloomberg reported at $25 billion or more.

Where the cash went

All four spent more on capital projects than a year earlier, and operating cash did not keep up: capital spending rose 88% while operating cash flow rose 26%. Our analysis of the October 28 results set Microsoft's and Alphabet's spending against their cloud revenue; the table below sets each company's spending against the cash its business produced.

Source: SaasBuzz analysis of the companies' 10-K and 10-Q filings and Amazon's third-quarter release. Four quarters to September 30, 2026. Capex is cash spent on property and equipment (Amazon's net of proceeds from sales and incentives), excluding finance leases.

Amazon is the one whose spending passed its operating cash. Its free cash flow for the twelve months was an outflow of $42.4 billion, against an inflow of $14.8 billion a year earlier, which its October 29 release said was "driven primarily by a year-over-year increase of $94.8 billion in purchases of property and equipment, net of proceeds from sales and incentives." The company said the increase "primarily reflects investments in artificial intelligence." Our report on Amazon's quarter covers AWS.

Microsoft spent the smallest share of its cash, 69%, and paid out the most: $48.0 billion in dividends and buybacks over the four quarters, against $16.6 billion at Alphabet and $5.4 billion at Meta. Amazon paid neither. Alphabet and Meta bought back no stock in the first nine months of 2026, after spending $39.8 billion and $26.2 billion on buybacks in the first nine months of 2025, their quarterly reports show.

Bonds and stock sales

Three of the four went to investors in the same twelve months, mostly for debt. Microsoft borrowed nothing and made no stock offering.

Source: SaasBuzz analysis of the companies' cash flow statements, four quarters to September 30, 2026. Cash received from borrowing and from stock offerings (public offerings, private placements and at-the-market sales); paid out is dividends plus buybacks. Meta's October offerings came after the period.

Alphabet raised the most this year: $85.2 billion of debt, $42.9 billion of common stock and $19.1 billion of mandatory convertible preferred stock in the first nine months, its 10-Q shows. The common stock came from a $20.5 billion public offering and a $10.0 billion private placement with an affiliate of Berkshire Hathaway, both in June, and $12.4 billion sold through an at-the-market program in the third quarter, as The Information also reported. Alphabet says the at-the-market proceeds "are primarily intended to be used to meet tax obligations associated with employee equity grants," and that the June money will be used "for general corporate purposes, including capital expenditures to scale AI infrastructure and global compute." Its long-term debt at face value rose to $127.5 billion from $49.1 billion at the end of 2025.

Amazon borrowed $130.0 billion over the twelve months, $48.1 billion of it in the third quarter, and its long-term debt rose to $173.1 billion from $65.6 billion at the end of 2025. Meta borrowed $54.8 billion.

This week's raises

Meta priced two offerings on October 26. Meta sold 250 million depositary shares in a 6.50% mandatory convertible preferred stock at $50 each, $12.5 billion, according to its prospectus; that offering closed on October 29. Meta also agreed to sell 40 million Class A shares at a public price of $625, $25.0 billion, under forward sale agreements with Morgan Stanley and Goldman Sachs. Meta expects to receive about $24.9 billion when it settles them, by November 19, 2027, the second prospectus says. In its announcement, Meta said it expects $135 billion to $145 billion of capital expenditures in 2026 and plans an at-the-market program of about $60 billion once its new Class C shares start trading, though it has not signed an agreement for one.

The Company intends to fund these investments through a balanced mix of operating cash flow, investment-grade debt, strategic partnerships, and equity capital.Meta, announcing its stock offerings, October 26, 2026

Microsoft filed a preliminary prospectus supplement on the morning of October 29 for ten series of notes, two floating-rate and eight fixed, with the amounts left blank. The supplement says the money is for general corporate purposes, which may include capital expenditures, and puts Microsoft's total debt at $35.5 billion on September 30. Bloomberg reported maturities of two to 40 years and that Microsoft last sold high-grade debt in 2017, when it raised $17 billion. Microsoft had not filed final terms as of 6:24 p.m. ET on October 29. Brett Kozlowski, a portfolio manager at GW&K Investment Management, told Bloomberg: "The timing of this deal feels opportunistic as we don't see a true need for issuance here." He expected strong demand for rare long-dated AAA debt. Hood gave Microsoft's reason on the October 28 call: "To complement cash generated by the business and preserve financial flexibility, we will access additional sources of funding when we believe it is attractive to do so."

Oracle (NYSE: ORCL), whose quarter ended August 31 and so falls outside this analysis, capped its further capital raising at $20 billion through fiscal 2030 at its investor day on October 28.

Leases: the financing off the balance sheet

Microsoft's chief financial officer was asked on its October 28 call how it would raise capital if it needed to, and named leasing first, according to Microsoft's transcript.

There’s a form of financing called leasing, and we’ve been using that one as a vehicle.Amy Hood, chief financial officer of Microsoft, on the October 28, 2026 earnings call

A lease goes onto the balance sheet as a liability when it begins. Until then, the company discloses the commitment but does not record it. Microsoft's 10-Q lists $364.6 billion of leases, "primarily for datacenters," that had not started at September 30, up from $329.1 billion three months earlier, "with some arrangements subject to certain contractual conditions being met." Meta's figure rose to $355.73 billion from $103.77 billion at the end of 2025, according to its 10-Q, and Alphabet's to $130.5 billion from $58.5 billion. Amazon disclosed $137.2 billion at June 30 in its second-quarter 10-Q, its latest figure.

Source: SaasBuzz analysis of 10-Q filings and Amazon's third-quarter release. Future payments on leases signed but not started, undiscounted, at September 30, 2026 (Amazon at June 30). Long-term debt is the balance sheet line at September 30.

Meta also uses partners. Meta holds 20% of two ventures building data center campuses in Louisiana and Texas, which it does not consolidate, and its maximum exposure to loss in them, including $41.5 billion of residual value guarantees, rose to $68.4 billion at September 30 from $46.0 billion at the end of 2025, before the Texas venture was formed in July. Its other non-cancelable contractual commitments, mostly for third-party cloud capacity, servers and network infrastructure, energy for data centers and Reality Labs hardware, were $454.52 billion.

The case against

The strongest objection is that these are some of the strongest balance sheets in business, so the borrowing says little. Long-term debt equaled 0.61 times the four companies' operating cash flow over the four quarters, from 0.16 times at Microsoft to 1.03 times at Amazon. Microsoft is rated AAA by Moody's and S&P, Bloomberg reported, and Meta says its Aa3 and AA- ratings "allow it to raise long-term debt efficiently." Alphabet ended September with $265.1 billion of cash and marketable securities, up from $126.8 billion at the end of 2025.

The spending also has contracts behind it. Microsoft's remaining performance obligations, revenue contracted but not yet recognized, were $683 billion at September 30, and Alphabet's revenue backlog was $567.7 billion, $560.8 billion of it for Google Cloud. "We feel good that the return on every dollar of CapEx we're spending, we're confident in that," Hood said. Andy Jassy, Amazon's president and chief executive, said in the release: "Our AWS investment in functionality and infrastructure is working." And the leases are not due today: Microsoft's start between fiscal 2027 and fiscal 2034, Alphabet's between 2026 and 2031, and Meta's through 2036.

All of that is true, and none of it changes where the money comes from: the four no longer pay for the build-out from operating cash alone. A top credit rating makes borrowing cheaper, and capital spending plus dividends and buybacks still exceeded the cash their operations produced. Backlog is revenue the companies expect over years, while lease payments, once a lease starts, and interest are owed on schedule. And investors' appetite is not unlimited: even while expecting strong demand for Microsoft's bonds, Kozlowski told Bloomberg that "massive supply creates challenges."

What it means for investors

Shareholders are now part of the funding. Alphabet sold $61.9 billion of common and preferred stock this year and Meta priced $37.5 billion of offerings this week, after both had spent heavily on buybacks a year earlier. Meta's preferred stock converts into common shares in 2029, and its forward sale adds 40 million shares when it settles.

The money is not cheap. Alphabet's third-quarter dollar notes carry a weighted-average coupon of 5.55%, against coupons of 0.80% to 2.25% on the dollar notes it sold in 2020, its filing shows, and Meta's preferred pays 6.50% a year. Bloomberg reported that early price talk on Microsoft's longest note, due in 2066, was as much as 1.35 percentage points over Treasuries.

What would change the conclusion

The finding would weaken if operating cash grew faster than capital spending, reversing the past year, when spending grew 88% and cash 26%. The companies' plans keep spending high for now: Hood said Microsoft's capital spending, by its own measure, which includes finance leases, will be about $170 billion in calendar 2026 and over $50 billion in the quarter to December, and Meta expects $135 billion to $145 billion this year. Hood also said Microsoft expects "to continue to remain free cash flow positive" in its fiscal year to June 2027.

What to watch: Microsoft's final bond terms and size; Meta's planned $60 billion at-the-market program, which waits on its Class C shares, due to be created when its amended charter takes effect on January 19, 2027; the $27.6 billion left in Alphabet's $40.0 billion at-the-market program; Amazon's third-quarter 10-Q, not yet filed, for its latest lease commitments; and the leases themselves, which move onto the balance sheets as they start.

Method

The rule, set before the figures were compiled: Amazon, Microsoft and Alphabet, whose AWS, Azure and Google Cloud rent out computing, plus Meta, which owns data centers in 23 US states, its October 26 announcement says. All four close a quarter on September 30. Oracle is left out because its latest quarter ended August 31. The period is the four quarters to September 30, 2026. Microsoft's fiscal year ends June 30, so its figures are the last three quarters of fiscal 2026 and the first of fiscal 2027; the other three use the calendar year. The year-earlier comparison covers the four quarters to September 30, 2025, by the same method.

Capital spending is cash spent on property and equipment as each cash flow statement reports it, Amazon's net of proceeds from sales and incentives, the measure its free cash flow uses. Finance leases are not included, though Microsoft and Meta count them in their own capital spending figures. Operating cash flow, debt raised, stock sold, dividends and buybacks are taken from the cash flow statements, and four-quarter totals are the annual figure plus the latest year-to-date figure minus the year-earlier one; Amazon reports the twelve-month figures itself. Leases not yet started are the undiscounted future payments each company disclosed, over terms of up to 30 years, so they are not the same thing as debt principal. Microsoft's bond size and maturities are as Bloomberg reported them, since final terms had not been filed.

Header photo: Chad Davis, CC BY 2.0, via Wikimedia Commons, cropped.