Amazon plans $200 billion in capital expenditures this year, pressuring free cash flow and unsettling investors despite long-term AI infrastructure bets.
Amazon (NASDAQ: AMZN) fell nearly 12% in June, its worst monthly performance among the “Magnificent Seven” except for Microsoft. The decline erased gains from an all-time high reached in early May, leaving the stock underperforming year-to-date through July 2.
The company’s $200 billion capital expenditure plan for 2024, the highest among peers, has drawn investor scrutiny. While Amazon leads global revenue, the spending—primarily on data centers and AI infrastructure—will weigh on free cash flow, a key metric for debt repayment and share buybacks. Returns on these investments remain uncertain, contributing to market unease.
Despite the near-term pressure, Amazon maintains its long-term growth narrative, citing AI-driven expansion as a strategic priority. The stock’s trajectory hinges on execution and eventual returns from its massive capex outlay.