Amazon AI Spending Hits Cash Flow as AWS Growth Accelerates

Amazon’s AI infrastructure spending has pushed free cash flow sharply lower even as AWS growth accelerates. In the 12 months to September 30, 2026, free cash flow swung from a $14.8 billion inflow to a $42.4 billion outflow, a $57.2 billion reversal. Amazon’s AI spending included $77.3 billion in third-quarter property and equipment expenditure, more than twice the year-earlier level. The company maintained its 2026 capital expenditure outlook of about $220 billion and indicated spending could rise further in 2027. The investment is supporting strong results: AWS revenue grew 39.3% year over year to $46 billion, its fastest pace in nearly five years, while quarterly total revenue rose 12% to $201.9 billion. Trailing-12-month operating cash flow increased 29% to $168.3 billion, but long-term debt reached about $173 billion. Amazon also reported record consolidated operating income of $28.1 billion and net profit of $20.7 billion, with an AWS backlog of $578 billion. Its fourth-quarter sales outlook was slightly below analysts’ expectations. Amazon shares fell 4.3% on October 29 and dropped a further 7% in after-hours trading as investors weighed the cost and potential returns of the AI buildout. Traders will watch AWS growth, cash generation and capital spending for signs that the investment can deliver returns. The results add to wider tech-sector scrutiny of AI spending, though they have no direct price implication for a specific cryptocurrency.