The Magnificent Seven are seven giant US technology companies: Apple, Microsoft, Alphabet, Amazon, Meta, Nvidia and Tesla. In the year to June 2026, Microsoft's business brought in $182.9 billion of cash. That was more than any of the other six. Yet Microsoft kept only $67.0 billion. It spent the rest, $115.9 billion, on data centres, buildings and equipment.
The cash left after that spending is called free cash flow. It is the money a company could pay to shareholders, use to repay debt or keep in the bank. Here is how free cash flow is worked out, how the seven compare on it and what it leaves out. All figures come from each company's filings with the US Securities and Exchange Commission (SEC).
What is free cash flow? Free cash flow is the cash a company's business brings in, minus what it spends on buildings, equipment and other long-lived assets. It is the cash left over to pay shareholders, repay debt or keep.
The formula is operating cash flow minus capital spending. Both lines sit in the cash flow statement.
Free cash flow can differ a lot from profit. Apple's free cash flow was 88% of its profit in its latest fiscal year. Amazon's was 10%.
Free cash flow yield is free cash flow divided by the company's market value. On 6 October 2026, it ran from 0.3% for Amazon to 2.4% for Meta.
What is free cash flow?
Free cash flow takes two lines from the cash flow statement, which we explain in How to Read a Cash Flow Statement:
Operating cash flow: the cash the business brings in from selling its products and services, after paying suppliers, staff and tax.
Capital spending: cash spent on property and equipment, such as buildings, servers and factories. Filings call it "purchases of property and equipment". It is also known as capital expenditure, or capex.
Free cash flow is the first line minus the second. Unlike net income, or profit, it counts only cash that has actually moved. US accounting rules, called Generally Accepted Accounting Principles (GAAP), do not define free cash flow. So companies publish their own versions, which can differ.
We use the simplest one for all seven companies. Each is shown for its latest full fiscal year that has been filed.
How to calculate free cash flow: Apple's 2025 fiscal year
Apple's fiscal year ended on 27 September 2025. Its cash flow statement shows:
Operating cash flow: $111.5 billion.
Purchases of property and equipment: $12.7 billion.
Free cash flow: $111.5 billion minus $12.7 billion, or $98.8 billion.
Apple spent 11% of its operating cash on capital spending. That left the largest free cash flow of the seven.
Free cash flow of the Magnificent Seven
Source: company SEC filings; YX Insights
Each bar is one company's operating cash flow. The blue part is free cash flow. The orange part is capital spending.
Apple and Nvidia kept the most. Nvidia had $96.7 billion of free cash flow, having spent 6% of its operating cash. Microsoft, Alphabet and Meta spent between 56% and 63%.
Amazon brought in $139.5 billion, but spent $131.8 billion of it, or 94%. That left $7.7 billion. Tesla made $14.7 billion of operating cash and kept $6.2 billion.
Together, the seven brought in $831.9 billion of operating cash. They spent $436.2 billion, or 52%, on capital spending. Free cash flow came to $395.7 billion.
The table shows the figures behind the chart. Fiscal years end in different months, so each is labelled.
Company (fiscal year) | Operating cash flow | Capital spending | Free cash flow | Net income | Stock-based pay |
|---|---|---|---|---|---|
Apple (fiscal year to 27 Sep 2025) | $111.5 billion | $12.7 billion | $98.8 billion | $112.0 billion | $12.9 billion |
Microsoft (fiscal year to 30 Jun 2026) | $182.9 billion | $115.9 billion | $67.0 billion | $133.7 billion | $12.4 billion |
Alphabet (2025) | $164.7 billion | $91.4 billion | $73.3 billion | $132.2 billion | $25.0 billion |
Amazon (2025) | $139.5 billion | $131.8 billion | $7.7 billion | $77.7 billion | $19.5 billion |
Meta (2025) | $115.8 billion | $69.7 billion | $46.1 billion | $60.5 billion | $20.4 billion |
Nvidia (fiscal year to 25 Jan 2026) | $102.7 billion | $6.0 billion | $96.7 billion | $120.1 billion | $6.4 billion |
Tesla (2025) | $14.7 billion | $8.5 billion | $6.2 billion | $3.8 billion | $2.8 billion |
Source: company SEC filings (Form 10-K); YX Insights
Free cash flow vs net income
Net income is the profit at the bottom of the income statement. Free cash flow differs from it for three main reasons:
Depreciation. Profit spreads the cost of equipment over its useful life. Free cash flow takes the full cost in the year the cash is spent.
Timing. Profit counts a sale when it is made, even if the customer pays later.
Items with no cash. Gains on investments raise profit without bringing in cash. Pay in shares lowers profit without costing cash.
Source: company SEC filings; YX Insights
The chart shows each company's free cash flow as a % of its net income. Above the dashed line, free cash flow was bigger than profit.
Apple's free cash flow was 88% of its net income. Nvidia's was 81%.
Amazon's was 10%. Its capital spending was 2.0 times its depreciation, the yearly equipment cost that profit counts. So cash went out much faster than profit recorded it.
Tesla is the only one above 100%. Its free cash flow was $6.2 billion, against $3.8 billion of net income. On the filed figures, before rounding, that is 164%.
Two things pushed Tesla's figure up. Its net income was only $3.8 billion. Its capital spending also fell, from $11.3 billion in 2024 to $8.5 billion.
Free cash flow yield: free cash flow against market value
Free cash flow yield is free cash flow divided by market value. Market value is the share price times the number of shares.
We use the closing price on 6 October 2026 and the latest share count in each company's filings. For Alphabet and Meta, every share class is added in.
Source: company SEC filings; YX Insights
Meta had the highest yield, at 2.4%. Apple was at 2.0%, while Alphabet, Microsoft and Nvidia were each at 1.7%. Tesla and Amazon were at 0.4% and 0.3%.
A yield of 2.0% means $2.00 of last year's free cash flow for each $100 of market value. A low yield means more of the price rests on cash the company has yet to make. Price-to-free-cash-flow, used in What Is Terminal Value?, is the same measure turned upside down.
The stock-based pay caveat
All seven companies pay staff partly in shares, known as stock-based pay. That cost lowers net income. It costs no cash, so it is added back in operating cash flow. Free cash flow therefore leaves it out.
The cost still falls on shareholders. New shares dilute their stake, unless the company spends cash buying shares back.
Taking stock-based pay off free cash flow changes the picture. Alphabet's $73.3 billion falls to $48.3 billion. Meta's $46.1 billion falls to $25.7 billion. Amazon's turns negative, at minus $11.8 billion. Its stock-based pay was $19.5 billion.
What free cash flow misses
Free cash flow has limits:
One year can mislead. Microsoft's operating cash rose 54% from fiscal 2024 to fiscal 2026. Its free cash flow fell from $74.1 billion to $67.0 billion, because capital spending rose faster.
Growth spending looks like a cost. Filings do not split spending that keeps the business running from spending that grows it. A company building heavily shows low free cash flow today.
Definitions differ. Amazon's own measure takes proceeds from equipment sales and incentives off capital spending. On that basis, its 2025 free cash flow was $11.2 billion.
Some spending sits elsewhere. Buying another company appears in the investing section, but not in capital spending.
How to read free cash flow
A few checks help with any company:
Look at several years. One heavy building year can push free cash flow down for a time. Tesla's record since 2016 is in our guide to the reverse Discounted Cash Flow (DCF).
Compare it with net income. Free cash flow far below profit for years deserves a closer look.
Take off stock-based pay. It shows the cash left after paying staff in full.
Check whose definition it is. A company's own figure may not match the simple formula.
Ask whether the spending earns its keep. That shows up later in the Return on Invested Capital (ROIC), explained in What Is ROIC?
Free cash flow is operating cash flow minus capital spending: the cash a business makes after paying for its buildings and equipment. Across the Magnificent Seven, it ran from $98.8 billion at Apple to $6.2 billion at Tesla. Read it over several years, next to profit and stock-based pay.
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Common questions about free cash flow
How do you calculate free cash flow?
Free cash flow is operating cash flow minus capital spending. Both figures are in the cash flow statement of any annual report. In its 2025 fiscal year, Apple's operating cash flow was $111.5 billion and it spent $12.7 billion on property and equipment. Its free cash flow was therefore $98.8 billion.
Is free cash flow the same as profit?
Free cash flow is not the same as profit. Profit, or net income, spreads the cost of equipment over many years and counts sales before the cash arrives. Free cash flow counts only cash that has moved. Apple's free cash flow was 88% of its net income in its latest fiscal year, while Amazon's was 10%.
Can free cash flow be negative?
Yes, free cash flow is negative when capital spending is larger than operating cash flow. That often happens when a company is building heavily, for example new data centres or factories. Amazon's free cash flow was negative in 2021 and 2022. A negative figure is a sign to check what the spending is for and how it is funded.
What is free cash flow yield?
Free cash flow yield is a company's free cash flow divided by its market value, the share price times the number of shares. It shows how much free cash flow the business made for each $100 of market value. On 6 October 2026, Meta's yield was 2.4% and Amazon's was 0.3%, on their latest fiscal year's free cash flow.
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