One down, three to go. Alphabet kicked off Big Tech earnings this week — telling Wall Street it plans to spend even more than previously expected on artificial intelligence. Now, the question is whether fellow Club names Amazon , Meta Platforms, and Microsoft will follow suit when they report next week. “Capex trends are going to be the number one focus,” Club portfolio director Jeff Marks said Friday during the Morning Meeting . That’s because investors are no longer giving companies a free ride on spiraling capital expenditures, increasingly demanding monetization of all their infrastructure investments — or at least visibility towards monetization. (We explored this “AI rationalization” concept in a recent Club Check-In video .) It’s also the reason why hyperscaler stock prices have hit the skids in recent weeks. On one hand, they know they have to keep spending to keep up. On the other hand, hiking capex puts pressure on their ability to generate free cash flow (FCF), a critical measure of companies’ financial well-being. “They are spending because they see the demand and they don’t want customers to go elsewhere,” Jeff said. “But you can’t ignore what it’s done to free cash flow, either.” GOOGL YTD mountain Alphabet YTD Alphabet tried to thread that needle Wednesday evening when it raised its 2026 capital expenditure forecast by $15 billion at the midpoint to a range of $190 billion to $205 billion and reiterated that spending will increase further in fiscal 2027. The heavier investment pushed second-quarter FCF into negative territory, with outflows of $5.8 billion. It was the first negative quarterly reading in the company’s history. The capex guidance overshadowed an otherwise impressive quarter — especially the 82% year-over-year surge in Google Cloud revenue. Even with strong cloud growth, Jim Cramer said he was not comfortable with the level of capex that the Google parent announced — wrestling with the increasingly expensive price tag attached to that growth. Since announcing plans to sell $85 billion worth of stock to offset spending, Alphabet has been trending lower. On Thursday, the day after earnings, the stock fell 7% on Thursday, following back-to-back losses. The stock rose modestly Monday and Friday, but was tracking to become our third-worst performing stock of the week, down almost 8% over the past five days. Shares of Meta and Amazon were not much better this week, sliding nearly 7% and 6%, respectively. Microsoft stock was losing more than 2% week to date. Meta and Microsoft report earnings Wednesday evening, with Amazon out after Thursday’s closing bell. Among the three, Meta may be the one to watch most closely. META YTD mountain Meta Platforms YTD The Facebook and Instagram company has already been ramping up spending to build the enormous computing infrastructure needed to support its AI ambitions. More recently, Meta has been preparing to launch a public cloud business to sell excess computing capacity to outside customers, giving another way to monetize those investments. Investors have already shown they can punish Meta when spending rises faster than expected. Last quarter, Meta increased its 2026 capital spending guidance to between $125 billion and $145 billion, a $10 billion increase at the midpoint to $135 billion, citing higher costs for memory, chips and other data center components. Shares plunged 9% following the report. At the time, Jim thought that Meta did not get the same leeway as the other hyperscalers because it didn’t have a cloud. Now that cloud plans are out there, perhaps Meta might get some room to spend more. Free cash flow will be a key line item next week, though last quarter FCF increased a healthy 20% and exceeded estimates. AMZN YTD mountain Amazon YTD For Amazon, Alphabet’s results likely offered the clearest justification for continued heavy spending. Google Cloud’s growth and swelling backlog suggest enterprise demand for AI computing remains robust and offers an excuse to keep spending and building. That’s a positive signal for Amazon Web Services, the world’s largest cloud infrastructure provider. Amazon has already committed enormous sums to expanding AWS capacity, including data centers and networking equipment. Custom AI chips are also becoming more important at Amazon — just like at Google. Last quarter , Amazon left its 2026 capex forecast unchanged at around $200 billion. We knew back in May that Amazon was projected to have negative free cash flow this year. That’s why Amazon has been tapping the corporate bond market to blunt the capex impact. MSFT YTD mountain Microsoft YTD Microsoft will face a similar test with its cloud business, Azure. While operating on a different fiscal calendar than its Big Tech peers, the cloud and software giant in April laid out roughly $190 billion in expected capital spending for calendar 2026. The company’s free cash flow has come under pressure in recent quarters. While the underlying demand for Azure is encouraging, as we saw with Alphabet, strong demand alone may not be enough to satisfy investors. Microsoft is one of the worst-performing megacap tech names, down 20% this year. Unlike Amazon and Google, Microsoft has major exposure to enterprise software, through its Office suite and other platforms. Software stocks have been crushed on the notion that AI could disrupt. Last month, Starbucks said it planned to drop software tools from Microsoft and IBM and use AI to make them in-house. The worry hit home more recently, after IBM preannounced a soft quarter and cut its outlook. In a bright spot, earlier this month, a Citi analyst went to bat for Microsoft’s much-maligned Copilot artificial intelligence assistant. While Jim was stunned by the research, any improvement in Copilot could make Microsoft’s software offerings more attractive. (Jim Cramer’s Charitable Trust is long GOOGL, AMZN, META, MSFT. See here for a full list of the stocks.) As a subscriber to the CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade. Jim waits 45 minutes after sending a trade alert before buying or selling a stock in his charitable trust’s portfolio. If Jim has talked about a stock on CNBC TV, he waits 72 hours after issuing the trade alert before executing the trade. THE ABOVE INVESTING CLUB INFORMATION IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY , TOGETHER WITH OUR DISCLAIMER . NO FIDUCIARY OBLIGATION OR DUTY EXISTS, OR IS CREATED, BY VIRTUE OF YOUR RECEIPT OF ANY INFORMATION PROVIDED IN CONNECTION WITH THE INVESTING CLUB. 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