At Amazon, Alphabet and Meta, capital spending now exceeds operating cash flow

In their latest reported quarter, Amazon, Alphabet and Meta each spent more cash on property and equipment than their operations brought in. Microsoft, which spends on a similar scale, took in more than it spent. All three have sold bonds in 2026. Alphabet and Meta have also turned to new stock.

In April–June 2026, Amazon took in $45.4 billion in cash from operations and spent $54.2 billion on property and equipment. Alphabet took in $39.1 billion and spent $44.9 billion, which put its free cash flow, as the company reports it, at negative $5.9 billion. Meta, the first of the four to report July–September, took in $32.8 billion in that quarter and spent $33.9 billion. Its free cash flow, which also subtracts principal payments on finance leases, was negative $2.12 billion.

Microsoft took in $55.4 billion from operations in April–June, the last quarter of its fiscal year, and spent $35.8 billion on property and equipment. CFO Amy Hood said on the 29 July call that free cash flow was $19.6 billion and that she expects Microsoft “to remain free cash flow positive in FY27.” In fiscal 2026 the company also bought back $22.3 billion of its own stock and repaid $3.0 billion of debt.

For Amazon, the gap shows over twelve months too. Its free cash flow for the twelve months to June was an outflow of $7.6 billion, against an inflow of $18.2 billion a year earlier, and the company says the main cause was a $66.1 billion rise in its net purchases of property and equipment. On the 30 July call, CEO Andy Jassy said Amazon would “spend a lot of capex and encounter free cash flow headwinds until these data centers come online, can be monetized, and we get a few years into these servers being utilized.” Over longer periods, Alphabet and Meta are still positive: Alphabet’s free cash flow for the twelve months to June was $53.3 billion, and Meta’s for January–September was $11.05 billion.

Amazon’s long-term debt at face value rose from $68.8 billion at the end of 2025 to $133.0 billion on 30 June 2026. It then sold another $25.0 billion of dollar notes in July and £4.25 billion of sterling notes in September. Besides property and equipment, Amazon invested $28.7 billion in OpenAI preferred stock in January–June and another $21.3 billion after June.

Alphabet sold $20.0 billion of dollar notes and $31.8 billion of notes in other currencies in January–June, and another $25 billion of dollar notes in August. In June it also sold new Class A and Class C shares and mandatory convertible preferred stock for net proceeds of $49.6 billion, to be used for general corporate purposes “including capital expenditures to scale AI infrastructure and global compute.” It bought back none of its own shares in January–June, after $28.3 billion in the same months of 2025.

Meta raised $24.91 billion from senior notes in May and bought back no shares in January–September, after $26.2 billion a year earlier. On 21 October it announced a new class of non-voting stock, which its special committee said “will provide Meta the ability to finance its growth.” On 26 October it launched offerings of about $22.5 billion of Class A stock, sold through forward sale agreements, and about $12.5 billion of mandatory convertible preferred stock. It said it intends to pay for its investments with “a balanced mix of operating cash flow, investment-grade debt, strategic partnerships, and equity capital,” and that it plans a program to sell about $60 billion of stock over time once the new Class C shares trade.

As of 26 October, Amazon, Alphabet and Microsoft had not yet reported July–September. Their next cash flow statements will show whether the gap between spending and operating cash flow has grown. In the Grid, you can keep the four companies as rows and these questions as columns, then run them again against the new filings.