Both Amazon and Alphabet reported negative free cash flow in Q2 FY2026, though their cloud businesses saw accelerated growth. Amazon's AWS revenue reached $42.2 billion, up 36.7% year-over-year, with a 39% operating margin. Google Cloud revenue surged 82% to $24.8 billion, with an operating margin of 35.6%. Alphabet doubled its long-term debt to $98 billion and suspended buybacks to fund AI capital expenditure, while Amazon self-funded its AI buildout from $45 billion in quarterly operating cash flow. The analysis suggests Amazon is better equipped to absorb this cycle due to its self-funding model and AWS's strong profitability.