Amazon supplied the clearest example. Its cloud business, AWS, grew revenue by 39% from a year earlier, while the group reported its highest operating margin. Yet over the past twelve months, free cash flow—the cash left after investment in assets such as servers and data centres—was negative $42.4 billion. The business generated substantial operating cash; the expansion consumed even more. Strong demand and a growing funding burden can exist together.

This changes the investment question. A supplier can collect payment when equipment is delivered, while the buyer must earn back that investment over years. If those returns arrive later than expected, the buyer may have to borrow, raise equity or slow expansion. Each route has a cost for shareholders, and slower expansion can eventually reach the suppliers too. We still favour the physical AI buildout, but the quality of customers’ financing now deserves as much attention as the size of their orders.

That concern is reaching creditors. After Friday’s close, S&P Global Ratings changed Meta’s outlook to negative, citing uncertainty around capital spending and free operating cash flow. This was a warning about the credit outlook, rather than an announced rating downgrade. It matters because investors buying debt are also asking how long heavy investment will outrun the cash it produces.

The market’s response broadened. Unlike Thursday, when many shares rose beneath falling headline indices, Friday saw about three Nasdaq stocks decline for every one that advanced. But the earnings evidence still demands discrimination: Intel reported positive quarterly adjusted free cash flow, even as its outlook and PC weakness unnerved investors. Its problems should not be treated as proof that every AI-linked business has the same economics.

Oil adds another constraint. December Brent settled near $118, up about 2.4% on the day. Higher fuel costs can squeeze household spending and business margins, while three US Central Bank (Fed) officials argued for further rate increases on Friday. There is a counterweight: quarterly wage growth slowed to 0.7% from 0.9%. Our conclusion is selective rather than sweeping: favour suppliers converting orders into cash, scrutinise the funding behind ambitious expansion, and require a valuation that allows for delays.