Cloud Giants' Accelerating Growth Defies AI Bubble Fears
Amid surging AI capital expenditures from global tech titans, market skepticism has grown, with critics questioning whether AI is a bubble delivering minimal returns on massive investment. But do the facts support this narrative?
Q3 Cloud Report: Cloud's 'Big 5' All Accelerate in Q3, Led by AWS Resurgence
According to the latest Q3 financial reports from the world's five largest cloud providers, year-over-year growth in their cloud businesses has uniformly accelerated.
Microsoft Azure continues to lead the pack with 40% growth, followed closely by Google Cloud at 34%. However, Amazon AWS, the largest provider by revenue, delivered a consensus-beating 20% year-over-year growth, marking its highest rate in 11 quarters. This performance decisively shatters the "AI cloud loser" label it had previously been assigned.
Here is the Q3 breakdown for the "Big 5":
– $Amazon (AMZN.US)$ AWS: Q3 revenue reached $33.0 billion, up 20% YoY (accelerating 300 bps from Q2) and up 7% sequentially. Operating profit was $11.4 billion, rising 9% YoY. Operating margin came in at 35%, contracting 300 bps YoY. Remaining Performance Obligations (RPO) stood at $200 billion, up 22% YoY.
– $Microsoft (MSFT.US)$ Azure: Q3 revenue reached $23.6 billion, surging 40% YoY (accelerating 100 bps from Q2) and continuing to lead the top five global clouds in growth. The Intelligent Cloud segment (Server + Azure + Enterprise Services) posted record revenue of $30.9 billion (up 28% YoY) and record operating profit of $13.4 billion (up 27% YoY). Gross margin for this segment was disclosed for the first time at 60%, contracting 400 bps YoY, while operating margin expanded 200 bps to 43%. Commercial RPO reached $392.0 billion, up 51% YoY.
– $Alphabet-C (GOOG.US)$ Google Cloud: Q3 revenue came in at $15.2 billion, up 34% YoY (accelerating 200 bps sequentially). Operating profit was $3.6 billion, with operating margin reaching 24%, expanding 700 bps YoY. RPO stood at $155.0 billion, surging 82% YoY.
– $Alibaba (BABA.US)$ Cloud: Q3 revenue was $5.6 billion, up 34% YoY (accelerating 800 bps sequentially). EBITA profit was $0.5 billion, with an EBITA margin of 9%, remaining flat YoY. AI-related revenue achieved triple-digit YoY growth for consecutive quarters. According to Omdia, Alibaba Cloud led China's AI cloud market in H1 with a 35.8% market share.
– $Oracle (ORCL.US)$ OCI: Q3 revenue hit $3.3 billion, soaring 55% YoY (accelerating 300 bps sequentially). RPO skyrocketed 359% YoY to $455.0 billion. Notably, on October 17—within a month of the earnings release—Oracle announced an additional $65 billion in orders, pushing total RPO above $500 billion.
Q3 CapEx for Top Hyperscalers: Spending Hits New Highs with Accelerated Growth
Since OpenAI launched ChatGPT in late October 2022, leading U.S. hyperscalers have aggressively ramped up capital expenditures, concentrating investments in AI compute capacity.
In Q3, the top five hyperscalers—Amazon, Microsoft, Google, Meta, and Oracle—collectively spent $121.8 billion in CapEx. This represents a staggering 81% year-over-year increase, an 8-percentage-point acceleration from the prior quarter, setting another all-time high. This quarter, Apple also announced its intention to increase its AI capital spending.
Market Insight: Hyperscalers Fueling Semiconductor Boom
Cloud computing and digital advertising currently represent the two scenarios with the highest ROI for data center semiconductors. With leading companies in both sectors reporting sustained revenue growth in Q3, they have correspondingly increased their spending on data center chips.
This high-conviction, long-term commitment to capital spending by cloud and advertising leaders is set to further bolster the already robust boom cycle for global data center semiconductor giants, including $NVIDIA (NVDA.US)$ , $Broadcom (AVGO.US)$ , $Advanced Micro Devices (AMD.US)$ , and $Intel (INTC.US)$ .
Disclaimer: Moomoo Technologies Inc. is providing this content for information and educational use only.
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CcSpPro : The strong remain strong.
Slay2dudes : ok
Nepo : growth at the fastest speed
林涌添 : 甲骨文的数据库及operating system 及cloud based ERP: Oracle Fussion 都做得很好
林涌添 : Therefore, Oracle's AI capabilities are undoubtedly strong as well.
74128907 :![[undefined]](https://static.moomoo.com/nnq/emoji/static/image/default/default-black.png?imageMogr2/thumbnail/36x36 "undefined")
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152325427 : Data is one of the most important assets required to excel in AI and nobody can beat Google in that. If at all the AI computing fork towards the quantum computing there also Google has made the most advantage.