Amazon earnings, AI capex and cash-flow pressure

Description Amazon’s results and valuation are being tested by AI-related capital spending, cash flow, AWS capacity demand and Trainium commercialization. Overview Amazon previously reported revenue and net income below cited FactSet estimates while investors focused on negative free cash flow and large capital spending. JPMorgan now estimates capex could rise to $395 billion in 2027 from about $220 billion planned for 2026. Amazon shares erased an initial post-earnings drop, while Jassy said Amazon is installing an AI accelerator about every 14 seconds and plans external Trainium sales in late 2027. Why it matters The outlook matters for Amazon investors, AWS customers, AI-chip buyers, suppliers and advertisers because heavy spending must be weighed against demand and cash generation. Key details • Trailing-12-month free cash flow was a $42.4 billion outflow. • Third-quarter capital spending was $75.9 billion. • JPMorgan estimates 2027 capex could reach $395 billion. • Amazon plans external Trainium chip sales starting in late 2027.