"Dylan Patel, CEO of Semianalysis, stated that Google's free cash flow will be basically zero next year, a revelation that he believes the market is unprepared for. He argues that this outcome is proof of Google's commitment to AI infrastructure, positioning them as the best capital allocators in history."
"Alphabet generated $73.266 billion in free cash flow in FY2025, but with capital expenditures projected between $175 to $185 billion for 2026, it will consume nearly all operating cash. The trajectory of capex has been accelerating, with a significant increase from $32.3 billion in 2023 to $91.4 billion in 2025."
"Amazon experienced a similar situation in 2025, with free cash flow collapsing 65.95% year-over-year to $11.194 billion as capital expenditures reached $131.8 billion. CEO Andy Jassy has guided for approximately $200 billion in capex for 2026, reflecting a trend among major tech companies."
Google's free cash flow is expected to drop to nearly zero next year as capital expenditures rise significantly. CEO Sundar Pichai has indicated that 2026 capex could reach $175 to $185 billion, consuming most of the operating cash flow. This trend is mirrored by Amazon, which saw a 65.95% decline in free cash flow in 2025 due to high capex. Other tech giants like Meta and Microsoft are also increasing their capital expenditures, indicating a broader industry trend towards heavy investment in infrastructure.
Read at 24/7 Wall St.
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