Amazon Free Cash Flow Fall From $38 Billion to $1.2 Billion: Bullish Memo Circulating to Justify Bigger Problems
Summary
Amazon's trailing twelve-month free cash flow plunged from about $38.2 billion to $1.2 billion, driven by roughly $59.3 billion more in property and equipment spending tied to AI investments. Combined 2026 capex for Amazon, Microsoft, Google and Meta rose to roughly $725 billion — about $100 billion higher than a bullish investor memo claimed — creating acute cash-flow pressure and making negative free cash flow for Amazon likely this year. The implied annual depreciation from the build-out approaches $400 billion, largely due to short-lived GPU assets that compress operating margins quickly, and many revenue-attribution assumptions in the memo are contested. Microsoft, AWS, and Google Cloud report material AI-related run rates (about $37B, >$15B, and $20B respectively), but non-cash equity gains and contested revenue definitions mean the spend is monetizing unevenly and remains risky rather than a sure bet.
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