Amazon reports massive Q3 cash burn and plans higher AI spending in 2027
Amazon posted third‑quarter results showing a free cash flow deficit of $42.4 billion and capital spending of $75.9 billion, driven largely by AI infrastructure. Revenue reached $201.9 billion, up 12% year over year, while AWS generated $46 billion, a 39.3% increase. CEO Andy Jassy said the company will spend "meaningfully more" on AI in 2027 and reaffirmed a $220 billion annual spending target for 2026. The stock slipped roughly 6‑7% after the earnings release.
Why it matters
The company states it can finance the expanded AI program despite the cash outflow. However, the large negative free cash flow and higher capex could strain Amazon’s balance sheet and weigh on future earnings expectations.
Key facts
- 1Free cash flow for the trailing twelve months was a negative $42.4 billion. businessinsider.com
- 2Cash capital expenditures in the quarter totaled $75.9 billion. businessinsider.com
- 3Quarterly revenue was $201.9 billion, representing a 12% increase from the prior year. gizmodo.com
- 4Amazon expects total annual spending of $220 billion in 2026, primarily for AI investments. businessinsider.com
- 5AWS revenue for the quarter was $46 billion, up 39.3% year over year. businessinsider.com
- 6Interactions with Alexa for Shopping grew 570% year over year. gizmodo.com
Open questions
- Material 1 reports a post‑earnings share decline of roughly 6%, while material 2 cites about 7%.
Summary written by AlphAI AI Desk from 2 of 2 sources. Not investment advice. Figures are as stated by the linked sources.