Alphabet Shares Drop 7% on $205 Billion Capex Hike, Dragging Magnificent 7 Stocks Lower
Alphabet shares dropped more than 7% after the company raised its 2026 capital expenditure guidance to $205 billion, marking the highest spending level among Big Tech firms. The announcement contributed to a broader decline in the Magnificent 7 group, which fell 4.8% for its steepest single-day drop since April 2025.
Alphabet reported negative free cash flow of -$5.9 billion in the second quarter, its first such reading since its 2004 IPO, and halted share repurchases for the second consecutive quarter to fund server and data center investments. The equity sell-off aligns with rising pressure in credit markets, as Moody’s warned that the scale of AI infrastructure spending threatens the credit quality of Amazon, Meta, Microsoft, and Alphabet. Credit investors are already pricing in higher financing risk, with 10-plus year corporate bond spreads for hyperscalers widening to their highest levels since 2022.
From the sources (16 posts)
@businessMicrosoft, Meta and Amazon face renewed investor anxiety over debt-fueled AI spending after Alphabet boosted its capex forecast by up to $15 billion
@beth_kindigMorgan Stanley projects Big Tech capex could hit $1.16 trillion in 2027, with Google leading spending at $350 billion and Amazon following at $308 billion. $GOOG $AMZN $MSFT $META
@cointelegraph🚨 JUST IN: Bond market concerns over AI spending are growing as Alphabet’s higher capex forecast pushes tech credit spreads wider, with investors demanding higher yields to finance the AI buildout.
@coinmarketcapLATEST: 📊 Moody's warns "unprecedented" AI capex, projected to hit $1T by 2027, threatens the credit quality of Amazon, Meta, Alphabet and other hyperscalers.
@globalmktobserv⚠️Big Tech's hidden AI commitments are EXPLODING: Future lease and purchase commitments across Alphabet, Amazon, Meta, Microsoft, Nvidia, and Oracle surged to a record ~$1.8 trillion. These commitments cover future spending on data center
@globalmktobserv🔴Alphabet’s buyback engine is GONE: Alphabet has not repurchased any shares since Q4 2025, going nearly 2 quarters without buybacks as it directs cash toward AI CapEx instead. TAP IMAGE TO SEE FULL INSIGHT👇
@globalmktobserv🚨 THE AI CREDIT BOOM IS STARTING TO CRACK: The bond market is sending a warning that equity investors are ignoring. CDS spreads for major AI infrastructure players have surged to record highs, led by Oracle and CoreWeave, as credit invest
@globalmktobserv‼️Google just posted negative free cash flow for the 1st time since going public: Alphabet's free cash flow turned negative to -$5.9 billion in Q2, marking its first negative quarter since the company's August 2004 IPO. TAP IMAGE TO SEE F
@globalmktobserv⚠️US Big Tech has flipped from returning massive cash to shareholders to demanding capital from investors: In 2023, Amazon, Alphabet, Meta, Microsoft, and Oracle were buying back as much as $40 billion of their own shares. That has now re
@photoncap$GOOGL, $AMZN, $META Alphabet raised its 2026 capital expenditure outlook to $195 billion–$205 billion, while Amazon expects to invest about $200 billion and Meta plans $125 billion–$145 billion. Together, the three companies could spend
@photoncapA difficult market does not necessarily mean it is time to give up on AI infrastructure stocks. Share prices can decline sharply as expectations and valuations reset, even while the underlying infrastructure investment cycle remains intact.
@globalmktobserv⚠️Investors are punishing Big Tech for spending too aggressively on AI: Alphabet, $GOOGL, shares dropped more than -7% on Thursday, their worst day in over a year, after the company raised its 2026 capital expenditure guidance to as much a
@globalmktobserv🔴Alphabet’s buyback engine is GONE: Alphabet has not repurchased any shares since Q4 2025, going nearly 2 quarters without buybacks as it directs cash toward AI CapEx instead. TAP IMAGE TO SEE FULL INSIGHT👇
@macroedgeresMoody’s says ‘unprecedented’ AI spending threatens credit quality of Amazon, Meta, Alphabet and others #MacroEdge
@globalmktobserv🔴Long-dated Big Tech bonds are trading like junk debt: Spreads on hyperscalers' 10+ year corporate bonds have surged to their highest level since the 2022 bear market, closing the gap with BB-rated junk bonds, according to Barclays. This
@globalmktobserv🚨 THE AI CREDIT BOOM IS STARTING TO CRACK: CDS spreads for major AI infrastructure players have surged to record highs, as credit investors demand higher compensation to fund the massive AI buildout. TAP IMAGE TO SEE FULL INSIGHT👇 https:/