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Analysts Warn: Magnificent Seven's Profits at Risk

11/5/2025

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Summary

Story summary

Analysts warn that profits from the Magnificent Seven may not be sustainable amid large AI investments.
Hyperscalers' free cash flow could drop over 40% in the upcoming quarter.
Microsoft and Amazon together project about $350 billion in capex this year.
This capex accounts for 60% of their operating cash flow.
Smaller firms report positive returns from generative AI, while the larger firms face investor pressure and questions about profitability.

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Story summary

Analysts warn that profits from the Magnificent Seven may not be sustainable amid large AI investments.
Hyperscalers' free cash flow could drop over 40% in the upcoming quarter.
Microsoft and Amazon together project about $350 billion in capex this year.
This capex accounts for 60% of their operating cash flow.
Smaller firms report positive returns from generative AI, while the larger firms face investor pressure and questions about profitability.