US Stock Market: Big tech's AI spending boom raises cash flow concerns despite early returns

Big tech hyperscalers Microsoft, Alphabet, Amazon, Meta and Oracle are projected to spend more on capital expenditures than they generate in free cash flow by 2027, with capex expected to rise by around $534 billion against $340 billion in additional operating cash flow. Oracle's free cash flow has turned negative, with shares down 36 percent year-to-date, while Amazon's free cash flow declined sharply to $1.2 billion despite 30 percent growth in operating cash flow. Consensus estimates for 2026 capex across the five companies have climbed from about $485 billion in January to roughly $730 billion in July, raising concerns about whether AI-driven revenue growth can justify the heavy spending.