Alphabet just cratered 10% after Wall Street decided open-ended AI spending is no longer acceptable, and Amazon reports tonight with a $220 billion capex plan and no free cash flow recovery date in sight.
This week Wall Street set a new rule for AI companies: heavy capex is fine as long as you show the payoff. Amazon (NASDAQ:AMZN | AMZN Price Prediction) reports third-quarter results after the close today. AWS growth measured against capex will decide how the stock responds.
Alphabet Flunked, Oracle Passed, Microsoft Delivered
Alphabet (NASDAQ:GOOGL) missed EPS consensus by 28.52% and ended a 12-quarter beat run, even though Google Cloud grew 103%. Capex reached $51.36 billion, free cash flow came in at negative $9.07 billion, and management signaled a significant increase in 2027 spending. Shares are down 10% in premarket trading. I’ve owned Alphabet since April 2012, and this reaction tells me patience with open-ended spending has run out.
Oracle (NYSE:ORCL) went the other…
