Megacap Tech Spend in 2026

Posted on | by Leon Hinde | Leave a Comment on Megacap Tech Spend in 2026

Tech’s megacaps announced major increases in capex for 2026, with the four hyperscalers now expecting combined spending of close to $700 billion.

Reaching those numbers is going to mean a big drop in free cash flow, with Amazon projected to turn negative this year.

The four hyperscalers are now projected to increase capital expenditures by more than 60% from the historic levels reached in 2025, as they load up on high-priced chips, build new mammoth facilities and buy the networking technology to connect it all.

Getting to those kinds of numbers is going to require sacrifice in the form of free cash flow. Last year, the four biggest U.S. internet companies generated a combined $200 billion in free cash flow, down from $237 billion in 2024.

While Amazon laid out the most aggressive spending plan among the megacaps, Alphabet wasn’t far behind. Pivotal Research projects Alphabet’s free cash flow to plummet almost 90% this year to $8.2 billion from $73.3 billion in 2025.

Analysts at Barclays now see a drop of almost 90% in Meta’s free cash flow, after the social media company said last week that capex this year will reach as high as $135 billion.

Inner Circle: Member-Only Content

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Microsoft’s commercial RPO reached $625 billion, up 110% YoY, with roughly $156 billion converting within 12 months.

Azure and other cloud services revenue grew 39% YoY, driving Microsoft Cloud’s topline to $51.5 billion, up 26%.

Commercial bookings surged 230% YoY, while remaining performance obligations beyond 12 months climbed 156%, strengthening long-term visibility.

Microsoft 365 Copilot reached 15 million paid seats, with seat growth up 160% QoQ and large-enterprise adoption tripling.

A $625 backlog with a growth rate that is accelerating, 39% growth in Azure, and explosive growth in Copilot all provide a level of revenue visibility .

Pepper Money

Posted on | by Leon Hinde | Leave a Comment on Pepper Money

Pepper Money jumps 27%. The company has confirmed that it has received a 100% takeover that could see the prominent non-bank lender delisted from the Australian Stock Exchange (ASX). Under the proposed deal, investment manager Challenger Limited will team up with Pepper Group ANZ HoldCo Limited to jointly acquire Pepper Money.

We’ve been bullish on Pepper Money following the recent string of Algo Engine buy conditions and the improving fundamentals.

Inner Circle: Member Only Content

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Oracle Announces Fiscal Year 2026 Second Quarter Financial Results

December 10, 2025

    • Q2 Remaining Performance Obligations $523 billion, up 438% in USD
    • Q2 GAAP Earnings per Share up 91% to $2.10, Non-GAAP Earnings per Share up 54% to $2.26
    • Q2 Total Revenue $16.1 billion, up 14% in USD and up 13% in constant currency
    • Q2 Cloud Revenue (IaaS plus SaaS) $8.0 billion, up 34% in USD and up 33% in constant currency
    • Q2 Cloud Infrastructure (IaaS) Revenue $4.1 billion, up 68% in USD and up 66% in constant currency
    • Q2 Cloud Application (SaaS) Revenue $3.9 billion, up 11% in both USD and constant currency
    • Q2 Fusion Cloud ERP (SaaS) Revenue $1.1 billion, up 18% in USD and up 17% in constant currency
    • Q2 NetSuite Cloud ERP (SaaS) Revenue $1.0 billion, up 13% in both USD and constant currency

    AUSTIN, Texas, Dec. 10, 2025 /PRNewswire/ — Oracle Corporation (NYSE: ORCL) today announced fiscal 2026 Q2 results. Total Remaining Performance Obligations were up 438% year-over-year in USD to $523 billion. Total quarterly revenues were up 14% in USD, and up 13% in constant currency to $16.1 billion. Cloud revenues were up 34% in USD, and up 33% in constant currency to $8.0 billion. Software revenues were down 3% in USD, and down 5% in constant currency to $5.9 billion.

    Q2 GAAP operating income was $4.7 billion. Non-GAAP operating income was $6.7 billion, up 10% year-over-year in USD and up 8% in constant currency. GAAP net income was $6.1 billion. Non-GAAP net income was $6.6 billion, up 57% in USD and up 54% in constant currency. Q2 GAAP earnings per share was $2.10, up 91% in USD and up 86% in constant currency. Non-GAAP earnings per share was $2.26, up 54% in USD and up 51% in constant currency.

    Short-term deferred revenues were $9.9 billion. Over the last twelve months, operating cash flow was $22.3 billion, up 10% in USD.

    “Remaining Performance Obligations (RPO) increased by $68 billion in Q2—up 15% sequentially to $523 billion—highlighted by new commitments from Meta, NVIDIA, and others,” said Oracle Principal Financial Officer, Doug Kehring. “Q2 GAAP earnings per share was up 91% to $2.10, and non-GAAP earnings per share was up 54% to $2.26. Our GAAP and non-GAAP earnings per share were both positively impacted by a $2.7 billion pre-tax gain in the sale of Oracle’s  interest in our Ampere chip company.”

    “Oracle sold Ampere because we no longer think it is strategic for us to continue designing, manufacturing and using our own chips in our cloud datacenters,” said Oracle Chairman and CTO, Larry Ellison. “We are now committed to a policy of chip neutrality where we work closely with all our CPU and GPU suppliers. Of course, we will continue to buy the latest GPUs from NVIDIA, but we need to be prepared and able to deploy whatever chips our customers want to buy. There are going to be a lot of changes in AI technology over the next few years and we must remain agile in response to those changes.”

    “Oracle is very good at building and running high-performance and cost-efficient cloud datacenters,” said Oracle CEO, Clay Magouyrk. “For years Oracle has been investing in AI and building autonomous cloud software. Oracle’s Autonomous Database and Autonomous Linux have been key to reducing human labor and human error in our datacenters. Because our datacenters are highly automated, we can build and run more of them. Oracle has over 211 live and planned regions worldwide—more than any of our cloud competitors. We are more than halfway through building 72 Oracle Multicloud datacenters to be embedded throughout the Amazon, Google and Microsoft clouds. We are committed to Cloud Neutrality because we believe that our customers should be able to run their Oracle databases in any cloud they choose. That strategy is definitely paying off. Our Multicloud database business is our fastest growing business—up 817% in Q2.”

    “AI Training and selling AI Models are very big businesses,” said Oracle CEO, Mike Sicilia. “But we think there is an even larger opportunity—embedding AI in a variety of different products. Oracle is in a unique position to embed AI in all three layers of our software products: our Cloud Datacenter software, our Autonomous Database and Analytic software, and our Applications software. All three of these Oracle software businesses are already big—AI will make them all better and bigger. AI allows us to automate complex multistep processes that were impossible to automate before AI. AI is enabling us to automate loan origination and risk quantification for banks and their customers. AI is enabling us to help doctors diagnose and care for their patients and manage the reimbursement process between healthcare providers and payers. All of the top five AI Models are in the Oracle Cloud. We have huge advantages over our applications competitors.”

    The board of directors declared a quarterly cash dividend of $0.50 per share of outstanding common stock. This dividend will be paid to stockholders of record as of the close of business on January 9, 2026, with a payment date of January 23, 2026.