Do Amazon and Alphabet's Combined $420 Billion in Capital Expenditures Make Sense?

Amazon and Alphabet are the top spenders in the data center industry. For 2026, Amazon anticipates investing around $220 billion, while Alphabet is estimated to spend between $195 billion and $205 billion. Alphabet has consistently increased its spending guidance each quarter for 2026, potentially surpassing the $200 billion midpoint.

Essentially, these two tech giants have nearly unlimited funds to expand their computing capabilities, but this is a staggering sum that could have otherwise been allocated elsewhere. In fact, if Amazon and Alphabet decided to distribute a one-time dividend using their combined capital expenditures, Amazon shareholders would have received $20.41 per share, and Alphabet investors would have received $16.40 per share.

This represents a significant portion of their stock prices, but would it have been a prudent decision? Let's explore further.