Amazon Beat Earnings… So Why Am I Worried?

Summary

Amazon's recent earnings report showed strong revenue and profit growth, with AWS sales accelerating to 28%. This performance helped the stock remain relatively stable, unlike other tech giants. However, the key concern for investors is a significant drop in free cash flow, down 95%, due to massive investments in AI infrastructure. While this spending is aimed at capitalizing on a huge AI demand opportunity, the market is carefully watching if these investments will eventually translate into sustained future cash flows, distinguishing Amazon from companies like Meta that lack a commercial cloud offering to monetize AI infrastructure.