MSFT · News · 20260801N

Operating Cash Flow and Capex Trends

MICROSOFT CORP · 2026-08-01 · Importance 41 · Surprise 48

Microsoft’s free cash flow fell 23% year over year after rising capital expenditures for AI infrastructure. Despite the decline, Microsoft remained free-cash-flow positive, contrasting with Alphabet and Amazon, whose free cash flow reportedly turned negative. Strong Azure growth is helping Microsoft absorb the increased AI infrastructure spending. Investors are weighing the cash-flow effect of higher capital outlays against expected AI and cloud monetization.

Key facts

• Capital expenditures increased roughly 70% year over year to $41 billion. source
• Microsoft generated $19.6 billion in free cash flow in the reported period. source