Part 6/10:
Despite the apparent success and profitability of these cloud services, the amplified capex predictions bring forth immediate concerns. With free cash flow (FCF) calculated from cash operations minus capital expenditures, higher capex typically leads to lower free cash flow in the short term. For instance, Google’s FCF is expected to remain stagnant if they continue ramping up their capex disproportionately to their operational cash flow. This situation underlines the contradiction between investing in growth and the immediate impact on cash flow metrics that investors prioritize.