"Amazon's free cash flow has faced ongoing declines amid aggressive investments. In the third quarter, trailing 12-month free cash flow dropped to $14.8 billion, down 69% from $47.7 billion a year earlier. This followed a slide from $18.2 billion in the second quarter, driven by a $50.9 billion year-over-year increase in property and equipment purchases. Cash capital expenditures reached $34.2 billion in Q3 alone, with $89.9 billion spent year-to-date."
"Amazon's capex spending ebbs and flows over time, marked by periods when its pouring money into new investments followed by phases of contraction where it waits for (and often sees) a payoff. During the heavy spending periods - such as the early years when it was building out AWS - spending ramped up to drive innovation and market leadership."
"Although this has weighed heavily on Amazon's performance, the trend may continue into the fourth quarter when it reports results later this month, as full-year cash capex is projected at $125 billion for 2025, a significant jump from prior levels. Management has indicated capex will rise even more in 2026 to support its expanding infrastructure needs ."
Amazon underperformed peers in 2025 as aggressive capital expenditures and slowing free cash flow pressured its stock. Trailing 12-month free cash flow fell to $14.8 billion, a 69% decline year over year, driven by large increases in property and equipment purchases and $34.2 billion in cash capex in Q3 alone. Full-year cash capex is projected at $125 billion for 2025, with management signaling further increases in 2026 to expand infrastructure. Capex historically cycles between heavy investment and contraction, and current spending centers on AWS and AI infrastructure intended to deliver future growth and market leadership.
Read at 24/7 Wall St.
Unable to calculate read time
Collection
[
|
...
]