Free Cash Flow Is (Still) The King and the Momentum Change in Free Cash Flow Is the Queen
In this insight, I compare the free cash flow and changes in free cash flow of the top 20 companies in the world (by market cap).
From 2024 to TTM (trailing 12 months ending 1Q 2026), the combined free cash flow of Samsung Electronics and SK Hynix surged by 158%.
On the other hand, the free cash flow of the four U.S. tech titans (Amazon, Alphabet, Meta, and Microsoft) are down 22% in the same period.
The game of chess is fascinating. I’ve played this game since I was young and it is fun and it can teach you about a lot of things including taking calculated risks and resilience. In chess, the Queen is the most powerful piece. Queen is able to both protect the King and attack the opponent most effectively.
Ever since the release of ChatGPT in late 2022, the technology world has changed upside down. The race to reach Artificial General Intelligence (AGI) first among the tech titans is on. This fight has resulted in an unprecedented spending on data centers, GPUs, and semiconductor chips.
This has resulted in the major tech titans (in particular Google, Microsoft, Amazon, and Meta) spending billions of dollars to achieve AGI and become the global leader in AI. This dramatic increase in capex by these tech titans in the past three years has resulted in reduction in their free cash flows. In particular, AI products including ChatGPT, Gemini, Claude, and Grok require huge amounts of computing power to operate their businesses.
Free Cash Flow and Changes in Free Cash Flow of the Top 20 Companies in the World
From investors’ perspective, they often seek companies that generate highest amounts of free cash flow as well as those with incremental improvements in free cash flow. In this insight, I compare the free cash flow and changes in free cash flow of the top 20 companies in the world (by market cap).
Samsung Electronics (005930 KS) and SK Hynix (000660 KS) recently entered this select group of the top 20 companies in the world this year, driven by the surging demand and prices of semiconductor chips. Samsung Electronics and SK Hynix have now risen to become the 11th and 12th largest companies in the world by market cap, respectively. Market Caps of Samsung Electronics and SK Hynix have already surpassed those of JP Morgan, Berkshire Hathaway, and Walmart.
Free Cash Flow Trends of the Top 20 Companies in the World - What Do You Notice?
There are several key trends on these 20 companies:
For Nvidia, its free cash flow surged from $3.8 billion to $119.1 billion TTM (trailing 12 months ending 1Q26). Now, only Apple is higher than Nvidia in terms of free cash flow in TTM. Back in 2022, 15 other companies in this list had higher free cash flow than Nvidia.
Also, notice the declining/flat free cash flow of the four tech titans (Alphabet, Microsoft, Amazon, and Meta) from 2024 to TTM. Free cash flow of these four companies combined declined from $233.8 billion in 2024 to $183.1 billion TTM. Free cash flow of these four companies as a percentage of total 20 companies declined from peak level of 40% in 2024 to 29% in TTM.
On the other hand, the combined free cash flow of Samsung Electronics and SK Hynix staged a major turnaround from a loss of $13.4 billion in 2023 to positive $26 billion in 2024, $44.8 billion in 2025, and $67.1 billion in TTM ending 1Q 2026. Free cash flow of these two tech giants in Korea as a percentage of total 20 companies increased sharply from 4% in 2024 to 8% in 2025 and 11% in TTM.
What to Look Out For
From 2024 to TTM (trailing 12 months ending 1Q 2026), the combined free cash flow of Samsung Electronics and SK Hynix surged by 158%. On the other than, the total free cash flow of the 20 companies increased by only 10% in the same period. Cleary, Samsung and SK Hynix are benefiting from the surging demand for their semiconductor chips and the numbers are showing up with material increases in free cash flow.
On the other hand, the free cash flow of the four U.S. tech titans (Amazon, Alphabet, Meta, and Microsoft) are down 22% in the same period, as these companies are spending heavily on building out their data centers and computing power to try to become the number one player in the global AI race.
