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 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. Tips on stories? Email brian.sozzi@yahoofinance.com.

Click here for in-depth analysis of the latest stock market news and events moving stock prices

Read the latest financial and business news from Yahoo Finance