Big Tech approaches ‘red flag’ moment: AI capex is so great hyperscalers could go cash-flow negative, Evercore warns

Big Tech approaches ‘red flag’ moment: AI capex is so great hyperscalers could go cash-flow negative, Evercore warns

Big Tech companies' massive AI capital expenditure spending is reaching unsustainable levels, with some hyperscalers like Amazon potentially facing negative free cash flow in 2026, according to Evercore ISI analysts. The surge in AI capex—with Meta spending $55 billion, Alphabet doubling to $180 billion, and Amazon increasing to $200 billion—is forcing companies to raise debt and could trigger a "red flag" for stock valuations if the trend continues.