AWS revenue jumps 37% — but Amazon's cash flow is negative
amazon's cloud revenue hit $42b as it spent $173b on capex, signaling investors prefer cloud hosts over ai labs.
amazon's q2 earnings showed aws revenue surging 37% year-over-year to $42b, validating a massive increase in capital expenditures that reached $173b for the fiscal year. despite negative free cash flow and a $220b forecast for 2026 capex, the stock rallied because cloud revenue is seen as a reliable return on ai infrastructure. this dynamic rewards amazon and microsoft while punishing companies like meta that lack clear revenue streams to justify heavy spending. the market behavior underscores a skepticism that demand for ai models will sustain the massive infrastructure buildout required to support them.