AI Cloud Stocks Fall as Big Tech Capex Comes in Light: Fastly Sinks 6%, Oracle and Nebius Drop 3%
Quick Read
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Fastly drops 6% and Oracle and Nebius each fall 3% as fears grow that lower hyperscaler budgets will slow AI cloud revenue ramps.
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Microsoft missed its $51B capex estimate by nearly $6B, while Alphabet came in $4B short, sending GOOGL down 11%.
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Microsoft CFO Amy Hood blamed delayed third-party capacity deliveries but insists customer demand still exceeds available supply.
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Two of the biggest buyers of AI computing power spent less on capital projects last quarter than Wall Street expected, and the AI cloud stocks that supply that expansion are falling. Fastly (NASDAQ:FSLY) stock is at $25.43, down 6%, in midday trading.
Among its AI cloud peers, Oracle (NYSE:ORCL) stock is at $140.57, down 3%. Nebius Group (NASDAQ:NBIS) stock is at $177.56, also down 3%.
Microsoft and Alphabet Spend Less Than Wall Street Expected
On October 28, Microsoft (NASDAQ:MSFT) reported $45.2 billion in capital expenditures and finance leases for Q1 FY2027. The total came in below Wall Street analysts’ consensus of $50.7 billion and short of Microsoft’s $50 billion target. Microsoft chief financial officer Amy Hood said some third-party capacity deliveries the company expected in the quarter were delayed, and she expects capital spending of more than $50 billion next quarter and approximately $170 billion for the calendar year.
A similar shortfall came from Alphabet (NASDAQ:GOOGL), which reported $51.36 billion in capital expenditures against Wall Street analysts’ consensus of $55.09 billion. Alphabet stock is at $287.67, down 11%, per Stocktwits. Microsoft stock is at $523.30, down 1%.
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That matters because Microsoft buys computing capacity from outside AI cloud providers, including Nebius and CoreWeave. Slower deliveries and lower spending raise questions about how quickly those providers’ revenue ramps, though Hood didn’t tie the delays to any named supplier. The power, cooling and networking names behind the data centers are part of the same expansion story (we rounded up seven of them in a free report on the AI infrastructure stocks that aren’t chipmakers). Her read on demand stayed firm: “Customer demand continues to exceed available supply.”
Oracle Gives Back Part of Its Investor Day Rally While Momentum Names Slide
On October 28, Oracle stock rallied 11% to close at $144.54 after the company’s investor day. At that event, Oracle forecast $30 billion in free cash flow by fiscal 2029 and capped new financing through fiscal 2030 at $20 billion, split between $10 billion in equity and $10 billion in debt. Management also reaffirmed Oracle’s $225 billion revenue target for fiscal 2030 and pointed to $664 billion in remaining performance obligations, or signed contracts not yet billed.
Those targets followed negative free cash flow of $23.7 billion at Oracle in fiscal 2026, and the funding cap helped ease debt concerns that had hung over the stock. The decline gives back part of that rally as the rest of the AI cloud group sells off. Oracle stock is still down 27% year to date, even after that jump.
Momentum names had far more to give back. Fastly stock is up 150% this year, a run that came alongside six straight quarters of earnings beats, including its Q4 2025 results. As an edge cloud and security platform, the company earns usage-based revenue from internet traffic, and its slide moves in step with the group even though management has said AI traffic is growing 6.5x faster than human traffic. The company lifted its full-year 2026 revenue guidance to $732 million to $746 million on August 5.
Nebius stock is up 112% this year, and its pure-play GPU cloud model ties it more directly to hyperscaler spending than Fastly or Oracle. Three customers made up 24%, 21% and 14% of Nebius’s revenue in Q2 2026. CoreWeave stock is at $64, up 0.1%, essentially flat and apart from the group even though it’s a major Microsoft supplier. That stability follows a rough year, with CoreWeave stock down 11% year to date.
What Microsoft Capacity Delays Mean for Oracle, Fastly and Nebius
The next test for Microsoft is whether its delayed third-party capacity arrives in the second half of its fiscal year, as Hood expects. A smooth transition could restart the ramp for Nebius and CoreWeave, while another slip could stretch their revenue schedules further. Upcoming spending updates from other cloud giants could either confirm that worry or ease it.
For Oracle, the open question is whether the company stays within its new funding cap while it keeps building data centers. Fastly faces a different test, since its growth rests on AI traffic and security demand more than on hyperscaler budgets. Bullish investors can point to Hood’s view that demand still exceeds supply, while the bears can cite heavy spending and customer concentration across the group. A cautious approach may make sense while the timing of Microsoft’s delayed capacity remains unresolved.
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