{
  "id": 17121727,
  "title": "Cash takes centre stage as investors rethink AI spending boom",
  "url": "https://urgent.news/2026/10/29/cash-takes-centre-stage-as-investors-rethink-ai-spending-boom",
  "topic": "ai",
  "section": "AI",
  "published": "2026-10-29T18:57:00.000Z",
  "source": {
    "name": "The Economic Times - Top News",
    "slug": "the-economic-times-top-news",
    "url": "https://economictimes.indiatimes.com/markets/us-stocks/wall-street-guide/cash-takes-centre-stage-as-investors-rethink-ai-spending-boom/articleshow/135327536.cms"
  },
  "original_language": "en",
  "account": "Investors are increasingly prioritizing technology companies that generate cash to fund their artificial intelligence (AI) initiatives, rather than those whose AI spending exceeds their operating income, according to Reuters. Microsoft and Oracle have gained favor, while Alphabet has faced pressure due to rising AI costs and slower growth in its primary search business.\n\nAlphabet's share price dropped over 13% on Thursday, while Oracle fell 4% and Microsoft decreased by 0.45% at 3:48 pm ET. This shift in investor sentiment indicates that simply spending large sums on AI no longer guarantees favorable market reactions.\n\nAlphabet's AI expenditures exceeded its operating cash flow by 121.4% in the September quarter, compared to Microsoft's 68%, according to Reuters. Microsoft, which excluded finance leases, generated $18.6 billion in free cash flow in its fiscal first quarter, surpassing Wall Street's expectations by nearly $10 billion. Azure revenue surged 48% during the same period.\n\nAlphabet's core search business, however, reported a 12% revenue growth in the quarter, falling short of the anticipated 14.7% increase. CEO Sundar Pichai acknowledged that search queries were growing at their fastest pace in five years.\n\nThe slower-than-expected search revenue growth has raised concerns that AI-driven chatbots and agents could disrupt Alphabet's core business, funding its expansion plans. Additionally, Alphabet's capital expenditure is projected to reach $205 billion this year, with Google Cloud revenue more than doubling to $30.71 billion; however, the company's cash burn reached $9.07 billion, highlighting the strain of its investment program.\n\nMicrosoft's recent quarter showcased disciplined growth, contrasting with Alphabet's cash burn and below expectations in its core business, according to Melissa Otto, head of research at S&P Global Visible Alpha.",
  "summary": "Investors are increasingly focused on technology companies' cash generation capabilities to fund artificial intelligence investments. Microsoft and Oracle are gaining positive attention from investors, while Alphabet faces challenges due to rising AI costs. Alphabet's spending has surpassed its operating cash flow, raising concerns about its financial sustainability. In contrast, Microsoft's…",
  "key_points": [],
  "editors_take": null,
  "illustration": null,
  "coverage": {
    "outlets": 1,
    "also_reported_by": []
  },
  "ai_generated": true,
  "disclaimer": "Summaries, key points and the editor’s take are written by software from other outlets’ reporting and may contain errors — always check the linked original."
}