Markets META +0.12% JUL 28, 2026

Meta, Microsoft report Wednesday into a market that just wiped $294B off Alphabet on a capex print

Combined 2026 hyperscaler capex now tracks to ~$724B, up 77% YoY. Investors want free cash flow, not another guide-up.

BY HENLEY MARRAST · MARKETS DESK

Meta Platforms and Microsoft report after Wednesday’s close into a tape that just erased roughly $294 billion of Alphabet’s market cap in a single session, punishment for a capex guide-up that a year ago would’ve been cheered. The vibe shift is legible in the numbers: Alphabet lifted its 2026 capital spending to as much as $205 billion, about $17 billion above the $188 billion consensus, and posted its first negative free cash flow quarter since the 2004 IPO. Shares fell more than 7%. The Bloomberg-tracked Magnificent Seven index dropped 4.8% on the session, its worst day since April 2025.

The frame investors are now pricing is straightforward. Combined 2026 capex for Alphabet, Microsoft, Amazon, and Meta tracks to roughly $724 billion on analyst estimates compiled by Bloomberg, up 77% year over year, with 2027 pushing toward $950 billion. Alphabet’s 82% cloud growth wasn’t enough. The cash-out line was.

“People are really focused on capex, obsessed with it. It used to be the more the better, but now it is the less the better,” said Jason Lemire, chief investment officer at Bold Wealth Partners. That inversion is the whole story.

Microsoft closes its fiscal 2026 on Wednesday and will deliver its first fiscal 2027 capex guide, which is the number the buyside is actually trading. Analysts polled by Yahoo Finance expect $87.7 billion in Q4 revenue, up 14.7% year over year, and $4.24 in EPS, landing full-year revenue near $329 billion versus $281.7 billion in fiscal 2025. In April 2026 the company said its AI business had reached a $37 billion annual run rate, up 123%. Shares are down 21% year to date, the second-weakest Mag Seven name of 2026.

Meta has already guided full-year 2026 capex to $125B–$145B, printed Q1 revenue of $56.31 billion, and reported ad impressions up 19% year over year, per CNBC’s Julia Boorstin. Shares are off 9.8% year to date.

The broader tape isn’t weak. Bloomberg Intelligence pegs S&P 500 blended Q2 earnings growth at 37.9%, with more companies raising guidance than cutting it. The revolt is narrow and specific: it targets the four names underwriting the AI buildout, and it’s pricing a doom loop in which every incremental dollar of GPU spend erodes the equity story that justified the spend in the first place. Wednesday night, two of those four will find out how narrow their margin for error has become.

Sources

About the author

Henley Marrast

MARKETS DESK

Henley Marrast covers AI-equity flow, accelerator demand, and earnings prints for AI Sheet Report. She leads coverage of the public AI complex from the New York markets desk, with a focus on the daily tape and quarterly results. She has been writing about technology markets for several years.