Tech stock investors have a $1 trillion problem that won't improve until at least 2028

Tech stock investors have a $1 trillion problem that won't improve until at least 2028 Brian Sozzi · Executive Editor Mon, August 3, 2026 at 2:09 PM GMT+2 2 min read META Tech investors hoping for less robust AI spending may have to wait until 2028 before the fog begins to lift on this balance sheet line item. Quick analysis: Consensus estimates for 2026 hyperscaler capital expenditures have been raised by a modest $36 billion since the start of the reporting season, according to new research from Goldman Sachs strategist Ben Snider. But 2027 capex estimates have jumped from $929 billion (23% annual growth) to over $1 trillion (33% annual growth) over this period.

This is more than $100 billion above estimates heading into the quarter, Snider pointed out. What's more, capex stands to exceed cash flow from operations from 2026 through 2028. The hyperscaler spending bonanza.

· Goldman Sachs The finer details: The reaction to large-scale capex by the hyperscalers has been rough for the bulls. Meta ( META ) raised the bottom end of its 2026 capital expenditure target, tightening the full-year spending range to $135 billion to $145 billion (up from $125 billion to $145 billion). But specifics about 2027 capital expenditures were nonexistent.

"We aren't providing a specific outlook for 2027 capex at this time," Meta CFO Susan Li told analysts on a late-Wednesday earnings call. "Infrastructure planning remains highly dynamic. Even this year, there are a range of outcomes embedded in our outlook.

" Meta's stock is down 7% over the past five days, and 14% for the year, per Yahoo Finance AlphaSpace data. Alphabet's second quarter capital expenditures came in at $44. 9 billion, slightly above Wall Street forecasts of $44.

7 billion. Full-year capex guidance was raised to $195 billion to $205 billion from $180 billion to $190 billion, with a "significant" increase seen for 2027, executives said on the earnings call.   Shares of Alphabet were crushed in response to its earnings report.

The bottom line: Free cash flow is king for the hyperscalers right now, and only Microsoft ( MSFT ) has a good story to tell there in the near term. Brian Sozzi is Yahoo Finance's Executive Editor, host of the ' Power Players With Brian Sozzi' podcast and a member of Yahoo Finance's editorial leadership team. Follow Sozzi on X @BrianSozzi , Instagram , and LinkedIn .

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