#capital-expenditures

#capital-expenditures

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.

Investors are beginning to scrutinize the huge sums companies like OpenAI, Meta Platforms Inc. and Microsoft Corp. are spending on AI, leading to heavy volatility in what had been some of the year's biggest momentum plays. As a result, Apple's position is being re-evaluated. While it's still considered a potential AI winner, it doesn't carry the risk of heavy capital expenditures and it does have ample cash on its books. That makes Apple shares a potential haven within the technology industry if the AI trade unwinds further.

Data center construction spend in the US hit a record high of $40 billion a year in June, Bank of America Global Research said in a new report issued this month. The report cited data from the US Census Bureau and noted that the new spending level is a 28% increase from the previous year. Amazon, Microsoft, Google, and Meta are leading the charge with sweeping expansion plans that could total more than $1 trillion in capital expenditures over the next few years.

Google Cloud posted $13.6 billion in Q2 revenue, up 32% year-over-year, driven by growth in core and AI products at a rate significantly higher than Cloud's overall revenue growth.