AI Capital Spending Is Booming. But What About Shareholder Returns?
Microsoft, Meta and Amazon posted strong revenue growth, but cash remaining after capital expenditure fell at Microsoft, Meta reported negative $2.12 billion quarterly free cash flow, and Amazon's trailing twelve-month free cash flow fell to negative $42.4 billion. The author ranks 35 companies for potential valuation dislocations over three to five years, with Intuit and RELX at the top and NVIDIA, Broadcom and Meta moved to Conditional dislocations. He says he is less certain how much capital will be needed to serve AI demand and how much cash will ultimately be left for shareholders.