Benzinga·2026-02-06 19:53Group 1: Microsoft - Microsoft's free cash flow (FCF) remains the most resilient among the Big 5 hyperscalers, projected at approximately 22%, while peers trend toward negative territory with FCF margins around 5% or lower [1][2] - The Big 5 hyperscalers are expected to spend nearly $700 billion in capital expenditures (capex) this year, reflecting a 65% year-over-year increase [1] - Despite strong FCF, Azure growth is stagnating in the high-30% range, with 365 Commercial Cloud growth at about 14%, while competitors are gaining market share [3] Group 2: Amazon - Amazon's fourth-quarter 2025 results were solid, with $213.4 billion in revenue and $24.98 billion in operating income, slightly above expectations, but the stock dropped about 11% due to lower-than-expected operating income guidance and increased capex for 2026 [4][5] - The backlog for Amazon Web Services (AWS) rose 22% sequentially to $244 billion, indicating strong demand, alongside continued retail momentum and robust advertising performance [5] - Amazon's guidance for first-quarter operating income of $16.5 billion–$21.5 billion is about 15% below consensus at the midpoint, influenced by higher costs related to Amazon Leo and international investments [6]