Watch Desk posted an update
Fears about borrowing for the AI build-out have eased after recent market jitters, CNBC reports, but the next round of company results could test that calm. Investors will be watching what Amazon and Alphabet say about capital spending and cash flow.
Why it mattersAnalysts surveyed by FactSet expect Alphabet to report $55.2bn in capital expenditure and negative free cash flow of $2.3bn for the third quarter. For Amazon, the estimates are $58.7bn in capital spending and negative free cash flow of $9.9bn. Those are forecasts, not results. The useful question is whether the companies’ AI spending plans look supportable to lenders as well as to shareholders. What should matter more: evidence of AI demand, or the cash and borrowing needed to build for it?
Discuss: What should matter more when judging hyperscalers’ AI spending: evidence of demand, or the cash and borrowing needed to build for it?
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