Yesterday we talked about the cleanest signal on the current state of AI demand. That signal is oversubscribed data storage.
Indeed, the signal from Seagate earnings showed up in today’s earnings reports across the AI kings.
They guided higher (either explicitly or implicitly). All four of them.
Google announced 2026 capex of as much as $190 billion, up from the $185 billion guide they gave just a few months ago, and said capex will “significantly increase” in 2027.
Microsoft upped 2026 spend to $190 billion and said remaining performance obligations ballooned to $627 billion, up 99% year-over-year.
Meta raised its 2026 capex range from $115-135 billion to $125-145 billion.
Andy Jassy at Amazon said “the faster AWS grows, the more short-term capex we will spend.” And then he said the AWS backlog for Q1 is $364 billion plus a $100 billion deal they just announced with Anthropic. That’s demand for compute. That means capex is going up.
So, the capex fatigue thesis didn’t show up. Instead, it continues to accelerate. And it’s because the demand/the revenue is locked in. They just can’t build the compute capacity fast enough.
But if there’s a chink in the armor, it’s that capex is starting to eat into free cash flow, until they can actually fulfill on the orders.
And it’s free cash flow that funds the huge buybacks the big tech stocks have done in recent years.
This is of particular interest because it ties directly into what the great macro trader Paul Tudor Jones said in an interview just published yesterday. He talked about the supply of stock coming down the pike with IPOs lining up on the docket. And he talked about the capex commitments from the hyperscalers “already eating into their cash flow.”
So, the broad “equity supply” will be growing, which means funding for the big IPOs will be coming out of existing tech stocks.
For those companies producing scarce inputs in the AI buildout or directly innovating to fuel the AI boom, the tailwinds remain.
For everything else, capital will be rotating out and toward the IPOs (SpaceX, OpenAI, Anthropic …).
