Tech’s megacaps announced major increases in capex for 2026, with the four hyperscalers now expecting combined spending of close to $700 billion.
Reaching those numbers is going to mean a big drop in free cash flow, with Amazon projected to turn negative this year.
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The four hyperscalers are now projected to increase capital expenditures by more than 60% from the historic levels reached in 2025, as they load up on high-priced chips, build new mammoth facilities and buy the networking technology to connect it all.
Getting to those kinds of numbers is going to require sacrifice in the form of free cash flow. Last year, the four biggest U.S. internet companies generated a combined $200 billion in free cash flow, down from $237 billion in 2024.
While Amazon laid out the most aggressive spending plan among the megacaps, Alphabet wasn’t far behind. Pivotal Research projects Alphabet’s free cash flow to plummet almost 90% this year to $8.2 billion from $73.3 billion in 2025.
Analysts at Barclays now see a drop of almost 90% in Meta’s free cash flow, after the social media company said last week that capex this year will reach as high as $135 billion.
