Chipmakers Set for Record $430B FCF as Big Tech's Cash Flow Turns Negative
Nvidia, Micron, Broadcom, and Applied Materials are projected to generate $430 billion in combined free cash flow over the next 12 months, more than triple two years ago. Meanwhile, Amazon, Alphabet, Meta, Microsoft, and Oracle's combined FCF is expected to turn negative for the first time.
A striking divergence is emerging in the tech sector. Nvidia ($NVDA), Micron ($MU), Broadcom ($AVGO), and Applied Materials ($AMAT) are now expected to produce a combined $430 billion in free cash flow (FCF) over the next 12 months—more than three times the figure from just two years ago.
In stark contrast, the combined FCF of Amazon ($AMZN), Alphabet ($GOOGL), Meta ($META), Microsoft ($MSFT), and Oracle ($ORCL) is projected to turn negative for the first time on record. This would mark a dramatic reversal from the $260 billion peak these companies reported in 2024.
The shift is driven by massive AI-related capital expenditures. Capital spending by the five tech giants is estimated to surge to approximately $1.8 trillion over 2026 and 2027 combined. As a result, chipmakers are becoming cash generators, while the AI giants burn capital at unprecedented rates.
Source: The Kobeissi Letter