Over the years, Amazon has worked hard to make money for their shareholders. Sometimes the plans work, sometimes they don’t. One of the things that Amazon has done is that they’ve trimmed back their workforce dramatically and that helps stock prices for a while, but now things are a little different.
According to axios.com,
‘Amazon shares fell sharply in extended trading Thursday after it reported plummeting free cash flow tied to its heavy investments in AI.
Investors are scrutinizing the heavy costs of AI infrastructure investments — a microscope that also dragged down Alphabet shares today after the Google parent’s earnings report.’
Amazon is underwater when it comes to spending on AI. On Thursday, they announced that their negative cash flow was at $42.4 billion. (That’s pretty damn negative.) Last year at this time they were up 14.8 billion.
The cause of all this red ink spending for AI. Amazon said they had an increase in spending of $94.8 billion in order to buy hardware and property to support their AI investments.
Amazon went on to say on Thursday that their total cash expenditure for 2026 is going to be in the neighborhood of $220 billion. As a result of that report, stock tumbled on Thursday and by the end of the closing of the stock market, Amazon stock was down 6.5%.
It’s not a total disaster.
Even with the unbelievable amount of spending that Amazon is going through right now the company still made money. Amazon said they had a reported revenue of 201.9 billion. That’s up 12% from last year, but that’s down from their predicted 202.2 billion that they were hoping for. Amazon had a total net income of 20.7 billion.
There are other things at play here. Amazon’s advertising revenue has gone down from last year, and they’re expecting more downward pressure as people start to use AI agents for shopping. Meanwhile, Amazon’s web services are up. Amazon CEO Andy Jassy said, “Almost as fast as we install capacity, customers are gobbling it up,”
When you look at these reports, the sums of money that they’re throwing around are absolutely staggering. The only thing that helps me make sense of it is to just knock off all the zeros. In a nutshell, Amazon just reported that even with all the spending, they posted a 10% net profit over the last 12 months.
Most small businesses would take that 10% net profit and be happy in this business environment.
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Amazon Inflatable Nightclub
Who needs to buy or rent a building to have the coolest nightclub in the city? You can now have a portable nightclub and set up wherever you want to party.
Just unroll the venue and turn on the blowers and in an instant, you’re a nightclub owner. The only thing is you’ll have to provide everything on the inside. This is just the blowup building.
Gallery Credit: Lori Crofford