Amazon’s $77 billion quarter of AI spending leaves free cash flow $42 billion negative

Amazon’s AI build-out is worrying investors, according to Bloomberg. Third-quarter capital spending reached $77.3 billion, according to CNBC, and the shares fell more than 6% in extended trading after the report.

Bloomberg’s video page was not readable when this was written, so the figures below come from CNBC’s report on Amazon’s results and from our earlier coverage of Amazon’s quarterly filing. None of them are independently verified here.

A record outlay that beat the forecast by $18 billion

CNBC reported that the $77.3 billion capex compares with $35.1 billion a year earlier and with an analyst estimate of $58.7 billion (FactSet). Amazon kept its 2026 capital spending forecast at about $220 billion.

Trailing twelve-month free cash flow was negative $42.4 billion. The previous quarter’s figure was negative $7.6 billion. Amazon attributed the shortfall mainly to purchases of AI-related equipment, CNBC said.

Revenue of $201.94 billion came in slightly under the $202.31 billion LSEG estimate, and earnings per share of $1.89 missed the $1.96 estimate. Fourth-quarter revenue guidance of $240 billion to $247 billion has a midpoint below the $244.5 billion consensus. Amazon also moved Prime Day into the second quarter in several countries, which CNBC said weighed on retail and advertising results.

AWS is growing faster, but retail and ads lagged

The cloud unit did what investors wanted. AWS revenue was $45.98 billion, up 39% and above the $45.29 billion consensus, CNBC reported. Advertising, at $19.64 billion, grew 11% but missed the $20.82 billion estimate, and online stores revenue of $68.47 billion was up 2%.

CEO Andy Jassy told investors Amazon expects to “spend meaningfully more in 2027” and sees a “clear line of sight to attractive financial returns.” CNBC also relayed his view that AWS growth should stay above 40% next year and in 2028. That is a forecast from management, not a result.

The bill is increasingly paid with borrowed money

Our report on Amazon’s 10-Q shows how the gap is being covered. The filing discloses a secured loan facility of up to about $80 billion for technology infrastructure, which Amazon can draw on from the first quarter of 2027 through the third quarter of 2028. It does not name the lenders or say how much is outstanding. A third-party analysis cited there puts long-term debt at $180.9 billion at September 30, up from $68.8 billion at the end of 2025.

Rivals face the same math, with different backlogs

Amazon is not alone. Techmeme, summarizing Reuters, says Microsoft, Alphabet, Amazon, Meta and Oracle returned only 9.3% of cash to shareholders in the first three quarters of 2026, a 15-year low. Techmeme, summarizing Bloomberg, says the five have more than $3 trillion of AI spending commitments over coming years.

The difference between them is the revenue already contracted. Microsoft reported that Azure grew 48% with a $677 billion backlog, a visible pipeline that its spending can be measured against. Microsoft is also weighing a $25 billion bond sale. Amazon’s AWS growth of 39% is strong, but it has not published a comparable backlog figure in the sources we read.

For readers, the practical point is that AI capacity is now financed by debt and by shrinking shareholder payouts, not only by operating cash. Jassy says the returns are coming; investors reacted to the time it may take. The reports do not say how far the share price finally moved, and our earlier coverage notes shares were down about 2% at midday Friday according to Investing.com.