Business · Companies · 2 hrs ago
Amazon’s AI spending drives cash outflow to $42.4 billion
Amazon said its cash outflow reached $42.4 billion in three months, nearly six times the previous level, as it paid for new AI data centres.
The spending weighed on the company’s finances and Amazon shares fell about 8% in after-hours trading.
Chief executive Andy Jassy said Amazon would invest $220 billion this year in AI infrastructure and spend significantly more next year.
Amazon Web Services, its cloud business, grew revenue about 39% to $46 billion, its strongest growth in around five years.
But advertising growth slowed, and Amazon’s revenue forecast for the current quarter came in below analysts’ expectations.
That raised concern that inflation could make shoppers spend less during the important Christmas shopping season.
Amazon reported a trailing 12-month free cash outflow of $42.4 billion as spending on property and equipment surged.
The company maintained its forecast of about $220 billion in capital expenditure for 2026 and expects spending to rise meaningfully in 2027.
Third-quarter revenue increased 12% to $201.9 billion, but fell below analyst expectations.
Amazon Web Services revenue rose 39% to $46 billion, while online sales and advertising growth slowed.
Amazon shares fell in after-hours trading as investors focused on spending, cash flow and the holiday-quarter sales outlook.
- Who
- Amazon, led by CEO Andy Jassy.
- What
- The company reported a $42.4 billion trailing 12-month free cash outflow and said its capital spending would rise meaningfully in 2027.
- When
- The results were reported on Thursday, October 29, 2026.
- Where
- Amazon is based in Seattle; the results concern the company’s worldwide business.
- Why
- Spending on property, equipment and AI infrastructure drove the cash outflow.
Amazon
Investors and analysts concerned about spending
Spending strategy
Amazon
Amazon says it sees strong demand for AI capacity and expects attractive financial returns.
Investors and analysts concerned about spending
Investors and analysts worry that sharply higher capital spending is draining cash and may not deliver returns quickly enough.
Business outlook
Amazon
CEO Andy Jassy said Amazon is well positioned in AI and expects AWS growth to remain strong.
Investors and analysts concerned about spending
Analysts pointed to below-expectation revenue and slower growth in retail and advertising as signs of weakness.
Amazon said it expected to spend $220 billion on capital expenditures in 2026.
Amazon reported $201.9 billion in revenue and a $42.4 billion trailing 12-month free cash outflow.
Amazon reiterated its 2026 spending forecast and CEO Andy Jassy said spending would be meaningfully higher in 2027.
- Free cash outflow
- $42.4 billion over the trailing 12 months
- 2026 capital expenditure forecast
- About $220 billion
- Third-quarter revenue
- $201.9 billion, up 12% year over year
- AWS third-quarter revenue
- $46 billion, up 39% year over year
- Fourth-quarter sales forecast
- $240 billion to $247 billion
6 sources
Amazon shares fall 6% as $77 billion AI spending raises cash flow concerns
Amazon’s $42.4 Billion Cash Burn Delivers Final Blow In a Rough Week For AI
Sorge ums Weihnachtsgeschäft: KI-Kosten reißen Milliardenloch in Amazons Bilanz
Amazon CEO sees AI spending 'meaningfully' higher in 2027
KI-Boom: Amazon profitiert von Cloud-Geschäft
Amazon projects fourth quarter sales below estimates
What people are saying
We can fund this plan
It will forever change our revenue. It will forever change our free cash flow.
The free cash flow looks like the ugly part of the report
AWS’s accelerating growth fell short of overblown expectations and the higher competitive bar set by Microsoft and Google