Cloud Growth Is Accelerating. But the Cash Flow Bill Keeps Getting Bigger.
RATING HOLD | 12-MONTH TARGET $255.00 | REFERENCE PRICE $240.35 | EXPECTED UPSIDE +6.1% |
Summary
I rate this company a Hold with a 12-month price target of $255, implying approximately 6.1% upside from the October 30 closing price. Growing earnings support the long-term outlook, but elevated capital spending clouds near-term returns.
A global retail and cloud platform delivered 3Q FY 2026 revenue of $201.9 billion, up 12% Y/Y, while operating income climbed 61% to $28.1 Bn. A record 13.9% operating margin highlights improving earnings power across its businesses.
Its cloud engine expanded 39.3% to $46.0 billion as enterprise AI infrastructure demand accelerated. Yet trailing twelve-month free cash flow turned negative $42.4 billion, reflecting the scale of the ongoing data-center investment cycle.
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