Amazon shares sink as it spends heavily on AI
The company reported plummeting free cash flow tied to its heavy investments in AI.
TL;DR
- Amazon's free cash flow plummeted to negative $42.4 billion over 12 months, a swing from a positive $14.8 billion previously.
- This decline is primarily due to $94.8 billion in increased spending on property and equipment for AI investments.
- The company anticipates capital expenditures of $220 billion in 2026 and expects to spend even more in 2027.
- Revenue of $201.9 billion and net income of $20.7 billion were both below S&P Capital IQ estimates.
- Advertising revenue growth slowed to 12% year-over-year, down from 26% in the prior quarter.