TechCrunch reports that investors are growing nervous as Alphabet, Amazon, Meta, and Microsoft plan more than $740 billion in capital expenditures this year. While Wall Street previously rewarded these enormous bets on AI infrastructure spending, enthusiasm has turned into anxiety over mounting debt and negative cash returns.
Key takeaways
- Alphabet, Amazon, Meta, and Microsoft plan over $740 billion in capital expenditures this year.
- The Nasdaq dropped 2.9% on Friday while chip stocks took heavy losses.
- Alphabet reported negative free cash flow of $9.1 billion in the third quarter.
- Microsoft raised debt alongside other tech giants while posting positive free cash flow.
What is driving the anxiety over AI infrastructure spending?
TechCrunch reports that the market anxiety spilled across trading floors on Friday. The Nasdaq fell 2.9% while chip stocks took a severe beating. Nvidia dropped 4%, Broadcom lost more than 5%, and Qualcomm tumbled 11%. Alphabet shares plummeted 12% on Thursday in its worst day on record, wiping out $500 billion in market value before falling again.
Investors worry that companies relying on overflowing free cash flow are taking hits as AI threatens their core business economics. Alphabet revealed negative free cash flow of $9.1 billion in the third quarter. At the same time, the popularity of Google's AI Mode chatbot feature inside Search is slowing advertising growth down to 12%, which is its weakest pace in five quarters.
How are Amazon and Meta handling free cash flow?
Amazon posted negative free cash flow of $42.4 billion over the past 12 months compared to positive returns the year before. The retail giant expects to spend $220 billion in capital expenditures this year. Even though AWS cloud revenue grew 39%, Amazon stock tumbled 7% following earnings.
Meta is also burning cash with a negative free cash flow of $2.1 billion in the third quarter. CEO Mark Zuckerberg noted that the Muse personal AI agent is very compute-intensive to run. Despite 26% ad revenue growth, Meta stock fell 10% last week. Meanwhile, Microsoft stood apart by recording $18.6 billion in positive free cash flow while spending $45.2 billion on capital expenditures due to capacity delays from third-party providers.
What happens next for the market?
S&P Global Market Intelligence figures show that Microsoft, Alphabet, Amazon, Meta, and Oracle raised a combined $326 billion in debt in 2026, tripling last year's total. These muddy market conditions might complicate Anthropic's upcoming IPO. Blackstone warned investors that Anthropic might miss an investment-grade rating after going public, leaving the company reliant on hyperscalers and third parties for compute infrastructure.
Frequently asked questions
Alphabet, Amazon, Meta, and Microsoft outlined plans to spend more than $740 billion on capital expenditures this year, according to TechCrunch.
Alphabet plummeted 12% on Thursday in its worst day on record, wiping out $500 billion in market value.
Alphabet reported negative free cash flow of $9.1 billion in the third quarter, which marked its second consecutive quarter in the red.
According to S&P Global Market Intelligence, Microsoft, Alphabet, Amazon, Meta, and Oracle raised a combined $326 billion in debt in 2026, which is triple the amount raised last year.
Microsoft spent $45.2 billion on capital expenditures, which was less than the $50 billion projected, due to delays in capacity from third-party providers.
Based on reporting by TechCrunch. Read the original article
