One down, three to go. Alphabet released its Big Tech earnings this week, telling Wall Street that it plans to spend even more on artificial intelligence than previously expected. Now, the question is whether other members of the same club, Amazon, Meta Platforms, and Microsoft, will follow suit in next week’s report. “Capital spending trends will be the biggest focus,” the club’s portfolio director, Geoff Marks, said at Friday morning’s meeting. That’s because investors are no longer allowing companies to free ride on rapidly increasing capital spending, and are increasingly demanding that all infrastructure investments be monetized, or at least have visibility into monetization. (We discussed this “AI rationalization” concept in detail in our recent Club Check-In video .) This is also why hyperscaler stocks have plummeted in recent weeks. On the other hand, they know they have to keep spending to stay afloat. Meanwhile, increased capital spending is putting pressure on a company’s ability to generate free cash flow (FCF), a key measure of its financial health. “They’re spending because they see the demand and they don’t want their customers to go elsewhere,” Jeff said. “But we also can’t ignore free cash flow efforts.” GOOGL YTD Mountain Alphabet YTD Alphabet sought to thread that needle Wednesday night, raising its 2026 capital spending forecast by $15 billion at the midpoint, setting it in the range of $190 billion to $205 billion, and reiterating that spending will increase further in fiscal 2027. Increased investment pushed FCF into negative territory in the second quarter, with an outflow of $5.8 billion. This was the first negative quarterly profit in the company’s history. The capital spending guidance overshadowed an otherwise impressive quarter, particularly with Google Cloud revenue increasing 82% year over year. Jim Cramer said that despite strong cloud growth, he is not satisfied with the level of capital spending announced by Google’s parent company and is struggling with rising prices that accompany that growth. Alphabet has been on a downward trend since announcing plans to sell $85 billion worth of stock to offset spending. The stock price fell 7% on Thursday, the day after the company’s results, after consecutive losses. The stock rose modestly on Monday and Friday, but has fallen nearly 8% over the past five days and is on track to be the third-worst performing stock this week. Shares of Meta and Amazon didn’t fare much better this week, dropping nearly 7% and 6%, respectively. Microsoft stock has fallen more than 2% since the beginning of the week. Meta and Microsoft announced their earnings on Wednesday night, and Amazon announced their results after the closing bell on Thursday. The most notable of the three may be the meta. META YTD Mountain Meta Platform YTD Facebook and Instagram companies are already increasing spending to build out the massive computing infrastructure needed to support their AI ambitions. More recently, Meta has been preparing to launch a public cloud business that will sell excess computing power to external customers and provide another way to monetize those investments. Investors have already indicated they could punish Meta if spending increases faster than expected. Last quarter, Meta raised its 2026 capital spending outlook from $125 billion to $145 billion, up $10 billion to $135 billion at the midpoint, citing rising costs for memory, chips and other data center components. The stock price fell 9% following the news. At the time, Jim believed that Meta didn’t have the same headroom as other hyperscalers because it didn’t have a cloud. Now that cloud plans are here, perhaps there is room to invest more in the meta. Free cash flow will be the main item next week, and last quarter’s FCF increased by 20%, exceeding expectations. AMZN YTD Mountain Amazon YTD For Amazon, Alphabet’s performance may have been the clearest rationale for continued heavy spending. Google Cloud’s growth and growing backlog suggest that enterprise demand for AI computing remains strong, providing an excuse to keep spending and building. This is a positive signal for Amazon Web Services, the world’s largest cloud infrastructure provider. Amazon has already committed significant funds to expanding AWS capacity, including data centers and networking equipment. Like Google, custom AI chips are becoming increasingly important at Amazon. Last quarter, Amazon maintained its 2026 capital spending forecast at about $200 billion. Amazon learned in May that free cash flow was expected to be negative this year. That’s why Amazon is tapping into the corporate bond market to cushion the impact of capital spending. MSFT YTD Mountain Microsoft YTD Microsoft will face similar challenges with its cloud business, Azure. Although it operates on a different fiscal calendar than its Big Tech peers, the cloud and software giant in April announced projected capital spending for 2026 of about $190 billion. The company’s free cash flow has been under pressure in recent quarters. As we saw with Alphabet, the pent-up demand for Azure is encouraging, but strong demand alone may not be enough to satisfy investors. Microsoft has been the worst performer among the big tech stocks, declining 20% this year. Unlike Amazon and Google, Microsoft is heavily involved in enterprise software through its Office suite and other platforms. Software stocks have tumbled on the idea that AI could be disruptive. Starbucks announced last month that it plans to eliminate software tools from Microsoft and IBM and create its own using AI. That concern has become more prevalent recently, after IBM pre-announced a weak quarter and lowered its outlook. On a bright note, earlier this month a Citi analyst replaced Microsoft’s much-maligned artificial intelligence assistant CoPilot. Jim was surprised by the study, but improvements to Copilot could make Microsoft’s software products even more attractive. (Jim Cramer’s charitable trusts are long GOOGL, AMZN, META, MSFT. See here for a complete list of stocks.) As a subscriber to Jim Cramer’s CNBC Investment Club, you will receive trade alerts before Jim makes a trade. After Jim sends a trade alert, he waits 45 minutes before buying or selling stocks in his charitable trust’s portfolio. If Jim talks about a stock on CNBC TV, he will issue a trade alert and then wait 72 hours before executing the trade. The above investment club information is subject to our Terms of Use and Privacy Policy, along with our disclaimer. 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