Big Tech Firms Slash Market Value Amid Rising AI Capex and Negative Free Cash Flow

Alphabet, Amazon, Meta, and Microsoft have announced capital expenditures exceeding $740 billion this year, largely earmarked for AI infrastructure such as data centers and chips. Investors are reacting with concern as these giants report consecutive quarters of negative free cash flow—Alphabet’s third‑quarter free cash flow fell to $9.1 billion, Amazon’s 12‑month free cash flow turned negative at $42.4 billion, and Meta’s third‑quarter free cash flow was $2.1 billion—while their core businesses face slowing growth. Alphabet’s search advertising revenue growth slowed to 12 % and its AI‑powered Search feature is eating into its main revenue stream. Amazon’s AWS grew 39 % in revenue, yet the company’s stock fell 7 % after reporting the negative cash flow. Meta’s ad revenue rose 26 % but the stock still dropped 10 %. The market has responded with a 2.9 % drop in the Nasdaq and sharp declines in chip stocks, including Nvidia, Broadcom, and Qualcomm. These developments highlight the tension between massive AI investment and the financial health of the companies driving it.