Mag7 stocks will continue to trade sideways and drop until Capex spending calms down
u/SelfMastery__ ·
Reddit — r/ValueInvesting
· June 25, 2026 at 18:23
· ⬆ 25 pts
· 💬 39 comments
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The post warns that Mag7 stocks (AMZN, MSFT, GOOGL, META) will trade sideways/down until massive AI CapEx spending subsides, citing combined $725B in 2026, up 77% YoY.
Author notes Google has already diluted shareholders to raise funds and expects others may follow, arguing the recent dips are not the bottom.
Quality: Moderate DD with specific CapEx figures and a clear bearish thesis, but lacks detailed valuation or competitive analysis – more a speculative warning based on capex trajectory.
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I don’t think these companies are going anywhere but be warned with these recent dips. I personally don’t think this is the bottom and with CapEx spending to reportedly ramp up, I think we will see lower levels through the year with these upcoming earnings. Google has already resorted to diluting shareholders to raise additional funds, and you can argue that they’ve been the cleanest in terms of where the money is going ..
Who’s to say META, Microsoft, and Amzn aren’t to follow ?
**Big Tech AI CapEx 2026**
Amazon leads the pack at \~$200B, followed closely by Microsoft at $190B (roughly $25B of which is attributed to higher memory/component costs). Alphabet (Google) comes in at $180–190B, after raising guidance by $5B post-Q1 earnings. Meta rounds it out at $115–135B, the smallest in absolute terms but the steepest proportional jump — up \~81% from $69B in 2025.
Combined, the four hyperscalers are on track to spend roughly $725B in 2026, up 77% from last year’s already-record $410B. Goldman projects the number crosses $1T by 2027.
Google raised capex guidance by $5B post-Q1 and has diluted shareholders; combined hyperscaler capex up 77% to $725B in 2026. Excessive spending without near-term ROI pressures margins and may lead to more dilution, weighing on share price. Short GOOGL as capex expansion continues through year, expecting further downside. Strong ad revenue growth could offset capex fears; AI monetization surprises.
Meta’s capex jumps 81% from $69B to $115-135B – steepest proportional increase among Mag7. This massive spending ramp is unsustainable without clear revenue returns, likely pressuring FCF and stock. Short META as market re-prices capex intensity and risk of similar dilution. Reality Labs breakthroughs; advertising strength.
Microsoft at $190B capex, $25B attributed to higher memory/component costs – ongoing cost inflation. High capex plus input cost pressures erode profitability, and MSFT may need to raise debt or dilute. Short MSFT as capex dominates earnings, with no near-term catalyst to reverse. Azure growth acceleration; enterprise AI adoption.
Amazon leads with ~$200B capex, the largest absolute spend among the four. Such enormous capital outlay strains cash flow and may force leverage or equity issuance, hurting shareholders. Short AMZN as the market digests the full impact of peak capex spending. AWS growth could justify spend; logistics efficiency gains.
This Reddit post, published June 25, 2026,
features u/SelfMastery__
discussing GOOGL, META, MSFT, AMZN.
4 trade ideas extracted by AI with direction and confidence scoring.