AMZN
New budget, same AI hunger
Amazon just told Wall Street it’s bumping its 2026 capital spending plan by another $20 billion, taking the target from $200 billion to $220 billion. The reason? AI infrastructure is eating memory chips like snacks at a movie theater, and AWS still can’t build capacity fast enough to satisfy demand.
The awkward funding question
During the second-quarter earnings call, an analyst asked how Amazon plans to pay for all this future AI and infrastructure spending. CEO Andy Jassy basically hit the corporate version of “we’ll cross that bridge later” and said there was “nothing to share today.”
He did say Amazon has already tapped the debt markets this year and still has a few financing levers to pull if needed. Translation: the company isn’t out of options, but it’s also not exactly browsing the clearance rack.
AWS is doing the heavy lifting
The spending spree isn’t happening in a vacuum. AWS revenue jumped 37% to $42.2 billion in the quarter, which was enough to beat expectations and mark the cloud business’s fastest growth in 18 quarters. Amazon also said its AI and chip businesses are each running above a $25 billion annualized revenue pace.
The catch? Free cash flow flipped from a positive $18.2 billion a year ago to negative $7.6 billion over the trailing 12 months. That’s the kind of math that makes bond investors squint.
Why investors care
Amazon’s stock can still love a strong quarter and hate the bill that comes with it. The company is signaling that the AI arms race is not just about winning customers — it’s about funding data centers, chips, and enough electricity to make your hometown utility nervous.
Big picture: AWS growth is still the headline win, but the capex climb is a reminder that in AI, the winners may be the ones with the deepest pockets and the best financing game.