Key Takeaways
- Google Cloud revenue grew 82% to $24.8 billion in the second quarter, against 42% growth for Microsoft’s Azure and 37% for Amazon Web Services.
- At those growth rates, Google Cloud would pass Azure in quarterly revenue within about a year, and Alphabet’s valuation doesn’t reflect that.
- The main risk is cost: Alphabet’s capital spending doubled to $44.9 billion last quarter, and its free cash flow turned negative.
- Alphabet and Microsoft both report on Oct. 28, and Google Cloud’s margin is the number to watch.
Alphabet (GOOG) grew Google Cloud’s revenue 82% last quarter, to $24.8 billion.
Over the same three months, Azure at Microsoft (MSFT) grew 42% to $29.4 billion, and Amazon Web Services at Amazon (AMZN) grew 37% to $42.2 billion.
Ranjan Roy went through those exact numbers on the latest episode of the Big Technology Podcast and said Google Cloud has “a meaningful shot” at passing Azure. Then he added: “I don’t think people…