Catenaa, Tuesday, June 30, 2026- Investors’ concerns on AI spending have erased $2.3 trillion in market value from Magnificent Seven stocks in June.

Of the seven companies, Microsoft has suffered the steepest losses, with its shares dropping 20% across the month. Nvidia has shed roughly 13% of its value, and Apple and Amazon have each given back around 8%. Since peaking in mid-May, the group as a whole is down more than 13%.

At the heart of investor unease is a spending spree: Amazon, Microsoft, Alphabet, and Meta have committed hundreds of billions of dollars to chip purchases and data center construction, with a portion of that outlay funded through borrowed money.

Across the industry, capital expenditures tied to AI are on track to top $700 billion in 2026, a year-over-year jump of roughly 70%.

The consequence for cash generation has been significant: forward free cash flow for the group over a 12-month horizon is projected to come in well below levels reached in 2024.

“We are going through another ‘gut check’ few weeks ahead for the tech trade as tech investors await a very important 2Q earnings season in July to further validate the AI Revolution buildout,” Dan Ives, Managing Director at Wedbush Securities, said in a note. “In the meantime, jitters will continue as worries around the costs of this once-in-a-generation tech buildout hit its next gear of growth.”

The pressure on the group reflects a broader shift in how investors view companies that were once celebrated for generating abundant free cash flow with minimal capital requirements.

Fundstrat Global Advisors’ Head of Research Tom Lee said last week on CNBC that Wall Street is struggling to reframe its understanding of these companies now that their capital profiles look fundamentally different from the low-overhead, cash-generative models that originally attracted investors.

“I do think investors are going to start to view that balance sheet as a workforce,” Lee said. “We are in a transition period of that narrative.”