Hyperscaler Competition Intensifies: Google Cloud Surge, Azure Backlog, Custom Silicon Arms Race

Google Cloud reported Q2 revenue growth of 82% with 35.5% margin and $195-205B capex, including custom TPU revenue recognition and on-prem push. Microsoft's post-earnings analysis reveals a $678B Azure backlog and Maia 300 custom silicon plans (300k+ units). Both directly challenge AWS's cloud-first approach and custom silicon narrative (Trainium/Graviton). Updated market share: AWS 29%, Azure 20%, Google 13% (Synergy 2026). Q2 growth rates: AWS 37%, Azure 43%, Google 82%—Google punished for capex, AWS favored for margin discipline.