Meta reported Q2 2026 revenue of $60.801 billion, including $59.4 billion of advertising revenue, and consolidated operating income of $18.775 billion, or approximately a 30.9% margin. Ad impressions rose 14% and average price per ad rose 12% year over year. Capital expenditures were $31.08 billion, operating cash flow was $31.86 billion, and free cash flow was $784 million.
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By Intermission· 2,684 words
What revenue, margins, and utilization would justify hyperscalers’ AI capital spending through 2030?
Data-center electricity demand surged amid infrastructure bottlenecks
[5]The IEA reported that data-center electricity demand rose 17% in 2025, with AI-focused data centers growing faster than overall data-center demand. It also described tightening supplies of grid connections, transformers, gas turbines, advanced chips and other IT components.
The IEA's reported 2025 demand increase supports the report's view that AI infrastructure faces physical constraints in addition to demand constraints. Tight power, grid, transformer, chip and component availability can delay commissioning or leave capital unproductive, so revenue growth alone does not establish an adequate return on invested capital.
Microsoft FY2025 Form 10-K disclosed asset useful-life ranges
[6]For the fiscal year ended June 30, 2025, Microsoft's Form 10-K listed estimated useful lives of two to six years for computer equipment and five to 15 years for buildings and improvements.
Alphabet reported strong Google Cloud growth and profitability
[3]Alphabet announced Q2 2026 results for the quarter ended June 30. Google Cloud revenue was $24.8 billion, up 82% year over year, with $8.8 billion of operating income—approximately a 35.5% operating margin from the rounded figures. Alphabet also reported $44.9 billion of company-wide purchases of property and equipment.
Microsoft reported Azure exceeding $100 billion and demand exceeding capacity
[1]At its FY2026 Q4 earnings call, Microsoft said Azure surpassed $100 billion in annual revenue, up 41%, and that customer demand continued to exceed available capacity. Microsoft also disclosed an extension of estimated data-center and office-building useful lives beginning in FY2027, stating that the change affected the timing of future depreciation and was expected to provide only a minimal FY2027 operating-income benefit.
Meta reported advertising growth alongside substantial AI-related reinvestment
[7]Meta reported Q2 2026 revenue of $60.801 billion, including $59.4 billion of advertising revenue, and consolidated operating income of $18.775 billion, or approximately a 30.9% margin. Ad impressions rose 14% and average price per ad rose 12% year over year. Capital expenditures were $31.08 billion, operating cash flow was $31.86 billion, and free cash flow was $784 million.
Amazon reported AWS growth while AI investment pressured free cash flow
[2]Amazon announced Q2 2026 results for the quarter ended June 30. AWS revenue was $42.2 billion, up 37% year over year, with $16.6 billion of segment operating income—approximately a 39.3% margin using the rounded figures. Amazon said its AI business exceeded a $25 billion annualized revenue run rate. Trailing-twelve-month free cash flow was negative $7.6 billion, primarily reflecting a $66.1 billion year-over-year increase in property-and-equipment purchases associated primarily with AI investment.
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