"Amazon's capital expenditures are projected to reach roughly $200 billion by 2026, significantly up from about $132 billion in 2025, primarily for AI infrastructure. This increase raised concerns about near-term free cash flow, which dropped to $1.2 billion over the trailing twelve months from $25.9 billion a year ago due to a $59.3 billion rise in infrastructure investment."
"In the first quarter, Amazon's revenue grew 17% to $181.5 billion, with AWS accelerating to 28% growth on a $37.6 billion base. Operating income increased to $23.9 billion from $18.4 billion a year ago, while AWS alone generated $14.2 billion in operating income, showcasing the effectiveness of the company's investments."
"Analysts remain bullish on Amazon due to strengthening demand across key segments. AWS is now experiencing its fastest growth rate in over a year, and the overall profitability is improving, indicating that the company's strategy is beginning to pay off despite elevated investment levels."
Amazon's stock trades at $263.99, with a Wall Street price target of $283.79, indicating a 7% upside. The recent selloff was due to increased capital expenditures, projected to reach $200 billion by 2026, raising concerns about free cash flow, which fell to $1.2 billion. However, Q1 results showed revenue growth of 17% to $181.5 billion, with AWS growing at 28%. Operating income rose to $23.9 billion, and net income reached $30.3 billion, indicating improved profitability and growth despite high investments.
Read at 24/7 Wall St.
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