Our four hyperCAPEX companies collectively spent almost $172 billion on CAPEX in Q2, up 29% from last quarter and up 77% from a year ago.
This quarter’s spend is more than they collectively spent for the entire year of 2023 ($155 billion), and their cumulative lifetime CAPEX spend is over $1.9 trillion.
At the halfway mark for the year, their collective CAPEX is just shy of $305 billion. They started the year guiding to spending over $640 billion, with the most recent revisions to guidance now projecting over $735 billion in CAPEX this year (+14% in six months!).
| 2026 Guidance CAPEX (Jan 26) | 2026 Guidance CAPEX (Apr 26) | 2026 Guidance CAPEX (Jul 26) | |
| Amazon | $200 billion | $200 billion | $220 billion |
| $175-185 billion | $180-190 billion | $195-205 billion | |
| Meta | $115-135 billion | $125-145 billion | $130-145 billion |
| Microsoft | $140+ billion (estimate) | $190 billion | $175 billion (but still $190b*) |
| TOTAL | $640+ billion | $695-725 billion | $735-750 billion |
Barring <insert your favorite AI bubble -popping scenario>, a trillion dollars in collective 2027 CAPEX spend still seems plausible (even if the growth rate in CAPEX spending were to slow by about half).
Aggregate trailing twelve month (TTM) free cash flow for our four HyperCAPEX companies is down 18% from last quarter and 24% from a year ago. Amazon has gone negative on a TTM basis, Google was negative for the quarter, and Meta barely positive for the quarter. A trend is emerging!
Amazon
Amazon corporate CAPEX was $54.77 billion (can’t forget finance leases), up 20% from last quarter and 65% from a year ago. A new CAPEX record!
AWS CAPEX was $48.6 billion, up 17% from Q1 and 203% from a year prior. A new CAPEX record! AWS spending was over 88% of Amazon’s overall CAPEX, which is down slightly from last quarter. (AWS has averaged just 44% of total corporate spend over the last ten years).
We now believe we will spend approximately $220 billion in cash CapEx in 2026. The higher cost of memory pushing this number up from our prior estimate of about $200 billion. Even at that amount, we will still not have enough capacity to meet all the demand we have in 2026, and I believe this dynamic will also be true in 2027, too.
$44.9B, up 26% from last quarter and up 100% from a year ago. A new CAPEX record!
Guidance for full year 2026 CAPEX bumped to $195-205 billion (was $180-190 billion a quarter ago and $175-185 billion in January).
Approximately 60% of our investment in technical infrastructure this quarter was in servers, and 40% was in data centers and networking equipment.
We had negative free cash flow of $5.9 billion in the second quarter, driven by our investments in CapEx.Free cash flow was $53.3 billion for the trailing 12 months.
Moving to investments, we are updating our full year 2026 CapEx guidance range to $195‑205 billion, up from our previous estimate of $180‑190 billion. The increase in the range is primarily due to an acceleration in the delivery of capacity to meet growing demand.
As we previously shared, we continue to expect our CapEx to increase significantly in 2027, and we’ll provide more details at a later date.
Meta
$31.08 billion, up 57% from last quarter and up 83% from a year ago. A new CAPEX record!
Guidance for full year 2026 CAPEX bumped to $130-145 billion (it was $125-140 billion a quarter ago).
Meta is also expanding its off-balance-sheet data center investments, announcing a new deal with BlackRock this week. So actual spend is and will be higher.
Capital expenditures, including principal payments on finance leases, were $31.1 billion, driven by investments in servers, data centers, and network infrastructure.
Free cash flow was $784 million.
We anticipate 2026 capital expenditures, including principal payments on finance leases, to be in the range of $130-145 billion, narrowed from our prior outlook of $125-145 billion.
Consequently, our current plans are geared towards maximizing
2026 and 2027 capacity.
The big Meta CAPEX question is not much how much they are spending, but what are they spending it for? There were glib references to options including selling compute, offering an API for their models, pursuing the enterprise, developer tooling, business agents and personal agents. But no focus and self-awareness seems low.
I continue to think Meta massively underestimates what it would entail for them to become a real platform provider. Not only would Meta have a huge array of services to build and harden, but given their long and glorious history of platform rug pulls, Meta’s permission to play in these spaces is really questionable. A wholesale genetic transplant may be required if they want customers to take a deep platform dependency on Meta.
And I’m not sure why anyone would look to Meta for personal agents that “improve your life, your health, your relationships, your finances”, but maybe that is a me problem.
Microsoft
$41 billion (CAPEX and finance leases), up 29% from last quarter and up 69% from a year ago. A new CAPEX record!
Capital expenditures were $41 billion including the impact from higher component pricing as noted in our guide. Roughly two thirds of our capex was for short-lived assets, primarily CPUs and GPUs as customers increasingly build solutions that leverage both AI and non-AI infrastructure.
The remaining spend was for long-lived assets. This quarter, total finance leases were $5.6 billion and were primarily for large datacenter sites. And cash paid for P, P, and E was $35.8 billion.
Customer demand continues to exceed available capacity.
…effective at the start of FY27, we are extending the estimated useful lives of our datacenters and office buildings, from 15 to 25 years, reflecting our operating history and expected use of these assets. The impact of this update is reflected in today’s guidance.
This change affects only the timing of future depreciation and is expected to have a minimal benefit to FY27 operating income. The greater impact is on capital expenditures as more of our future datacenter leases will shift from finance leases to operating leases as a result of this update. Finance leases are included in capital expenditures while operating leases are not. Outside of this useful life impact, our calendar year 2026 CapEx investment expectations remain unchanged. However, the shift from finance to operating leases adjusts our expectation to approximately $175 billion.
And we expect FY27 capital expenditures will grow year-over-year given demand signals across our portfolio.
In addition, we expect to remain free cash flow positive in FY27.
We expect CapEx spend will be over $50 billion including the lease reclassification impact from the useful life update. [Q3]
The shift of data centers to operating leases makes it look like Microsoft’s 2026 CAPEX will decline from the previously forecast $190 billion to $175 billion. In practice, overall spending is unchanged. They’re just shifting $15 billion out of the CAPEX bucket into operating expenses. I insist they break this out going forward so we can see aggregate/comparable spend.