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Money a company spends on long-term physical or strategic assets — factories, equipment, data centers, GPUs — rather than on day-to-day operating expenses. Capex shows up on the cash flow statement, not the income statement.
Why It Matters
Capex is how a company invests in its own future. The 2026 AI boom is essentially a story about hyperscaler capex: Microsoft, Google, Amazon, and Meta are collectively spending over $700 billion building AI infrastructure. Whether that spend pays off — and how fast — is the central debate driving every AI stock.
Key Points
- Capex is investment in long-term assets; OpEx is the cost of running the business day-to-day.
- Capex-heavy industries (cloud computing, semis, telecoms, utilities) trade differently than capex-light ones (software, services).
- When capex grows faster than revenue, free cash flow temporarily falls — bears watch this ratio closely in AI infrastructure debates.
Related Terms
Common Questions
Money a company spends on long-term physical or strategic assets — factories, equipment, data centers, GPUs — rather than on day-to-day operating expenses. Capex shows up on the cash flow statement, not the income statement. Capex is how a company invests in its own future. The 2026 AI boom is essentially a story about hyperscaler capex: Microsoft, Google, Amazon, and Meta are collectively spending over $700 billion building AI infrastructure.
Capex is how a company invests in its own future. The 2026 AI boom is essentially a story about hyperscaler capex: Microsoft, Google, Amazon, and Meta are collectively spending over $700 billion building AI infrastructure. Whether that spend pays off — and how fast — is the central debate driving every AI stock.
Capex is investment in long-term assets; OpEx is the cost of running the business day-to-day.
Capex-heavy industries (cloud computing, semis, telecoms, utilities) trade differently than capex-light ones (software, services).
When capex grows faster than revenue, free cash flow temporarily falls — bears watch this ratio closely in AI infrastructure debates.