RESEARCH
·
No. 146
·
The Cash Flow Handoff
The companies spending hundreds of billions on AI are watching their free cash flow disappear, but it’s moving somewhere very specific.
Jacob Radke
2 min read
Trailing-twelve-month free cash flow for hyperscalers and semiconductor companies, with Fjell estimates through 2027.
Source · Financial Modeling Prep stable API; Fjell estimates
Hyperscaler free cash flow
$159B
Latest reported trailing-twelve-month total.
Semiconductor free cash flow
$142B
Combined total through Q1 2026.
2027 semiconductor estimate
$419B
Fjell estimate based on current margins.
Category
Charts
Share
For the last decade, the big cloud companies — Amazon, Microsoft, Google, Meta, and Oracle — generated far more free cash flow (what’s left after a company covers its operations and its capital spending) than the chipmakers that supply them.
Hyperscaler (another name for the big cloud companies) free cash flow peaked around $239 billion in late 2024. It has since fallen to roughly $159 billion, even as revenue kept climbing. The reason is the roughly $700 billion AI infrastructure bill. Amazon’s trailing free cash flow is already slightly negative. Oracle’s is deeply negative as it builds out data centers.
The chipmakers sit on the other side of that spending. Combined free cash flow at Nvidia, Micron, Broadcom, and Applied Materials has gone from about $84 billion in 2024 to $142 billion in the first quarter of this year. Nvidia by itself now earns around $119 billion in free cash flow.
Extend consensus revenue and current capital-spending guidance forward and the lines cross. The chipmakers head toward $400 billion-plus by 2027 while the hyperscalers, weighed down by capital spending, dip below zero. The dashed section is an estimate, but the direction is already visible in the reported numbers.
Right now the money is moving from the companies building the infrastructure to the ones selling the picks and shovels. How long that lasts depends on when the infrastructure starts paying for itself.
Until next week,
Jacob
Sources & method
Source: Financial Modeling Prep stable API, trailing-twelve-month free cash flow summed by company group and sampled at calendar quarter ends.
Forward semiconductor figures use consensus revenue and current trailing free-cash-flow margins. Hyperscaler estimates use consensus revenue, operating cash flow, and capital-spending guidance.
Forward values are Fjell estimates, not forecasts. Group definitions: hyperscalers are AMZN, GOOGL, META, MSFT, and ORCL; semiconductors are NVDA, MU, AVGO, and AMAT.
Written by
Jacob Radke
Partner, Wealth Advisor
Jacob writes the weekly charts. Jacob leads the firm’s platform, including trading, research, portfolio systems and technology. He also sits on the firm’s board and investment committee, and advises client families.
Contact
KEEP READING
More from the archive
M&A and IPOs lead the banks higher
The six largest U.S. banks have returned roughly twice the market since the start of 2025. The deal machine is why.
READ
The AI Trade That Cost $45 Billion
The index finished July almost exactly where it started, yet two sides of the biggest trade of the year moved about fifty points apart.
READ
–$5.9 Billion
Alphabet’s free cash flow went negative for the first time in its public history. Not because the business is shrinking, but because it’s spending.
READ
tmrw, delivered straight to your inbox.
One letter a week, and the charts on Tuesdays. No sales material, and no list sharing. Unsubscribe in one click.
Like what you are reading?
Let’s talk about it.
If something we published applies to your own situation, that is the right reason to call.
See if you are a fit
Educational content only. Nothing published here is personalized investment, legal or tax advice, a recommendation of any security, or an offer to buy or sell. Views are as of the date of publication and are not updated. Past performance does not guarantee future results.
© 2026 Fjell Capital, LLC