- GOOG
- NVDA
Alphabet (NASDAQ:GOOGL)(NASDAQ:GOOG) spent $51.4 billion on capital projects in the third quarter of 2026 while it builds out its <a href="https://myappsplus.com/artificial-intelligence-answers-what-is-the-expected-result-of-the-liverpool-v-arsenal-clash/" title="Artificial intelligence answers: what is the expected result of the Liverpool v Arsenal clash?”>artificial intelligence infrastructure. That was more than double its spending a year before. And it isn’t planning to slow down. With its Oct. 28 report, the Google parent kept its 2026 range of $195 billion to $205 billion and said it expects that spending to grow significantly in 2027.
To hit even the bottom of this year’s range, Alphabet would have to spend around $63 billion in the fourth quarter alone. That would beat the third quarter’s total by about $12 billion, after a rise of over $6 billion from the second quarter.
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Microsoft (NASDAQ:MSFT), which reported the same day, spent $45.2 billion in its fiscal first quarter (the three months ending Sept. 30). That came in below the more than $50 billion it had guided for, because some capacity from third-party providers arrived late. But management expects spending to speed up in the second half of its fiscal year, mostly on central processing units (CPUs) and graphics processing units (GPUs).
Yet two of the firms supplying these data centers trade far below their highs. As of this writing, Nvidia (NASDAQ:NVDA) is around 10% below its Oct. 6 record close, and Vertiv (NYSE:VRT) is about 35% below its May record close — even after surging 16% on Oct. 28.
1. Nvidia
Of course, a big part of this spending goes to chips like Nvidia’s. Around three-quarters of Microsoft’s capital spending last quarter went to short-lived assets, mostly CPUs and GPUs, up from about two-thirds the quarter before. And CEO Satya Nadella said Microsoft has docked its first Nvidia Vera Rubin GPUs.
Nvidia’s revenue surged 106% year over year to $96.2 billion for its fiscal 2027 second quarter, which ended July 26. Management guided for fiscal third-quarter revenue of around $108 billion, which would be about 89% above the year-ago period.
Sequential growth is slowing, though. It’s come down from 22% in fiscal Q3 2026 to 20%, 20%, and 18% since, and the new outlook works out to about 12%.
In other words, Nvidia is still growing fast, just not as fast as before. But for a long-term shareholder, I think the more important trend is that customers keep upping their budgets, and Alphabet just said it plans to again in 2027.
