Is Amazon Stock Poised to Gain on Strong Free Cash Flow Growth?

Amazon (AMZN) is reportedly laying the groundwork for a free cash flow rebound, even as heavy AI spending pressures near-term cash generation. Trailing 12-month operating cash flow rose 33% to $161.4 billion as of June 30, 2026, but free cash flow swung to an outflow of $7.6 billion from an inflow of $18.2 billion a year earlier, reflecting a $66.1 billion increase in net capital spending, mainly for AI. Second-quarter net sales grew 20% to $200.6 billion, operating income rose 43% to $27.5 billion, and AWS sales climbed 37% to $42.2 billion, with AWS backlog at $496 billion and 2027 capacity largely reserved. Amazon now expects 2026 cash capex of about $220 billion, up from $200 billion, partly because of higher memory costs. The article compares this with Microsoft, which generated about $19.6 billion of free cash flow in the June 2026 quarter, and Alphabet, which posted negative $5.9 billion in second-quarter free cash flow and raised its 2026 capex outlook to $195–$205 billion, and suggests Amazon's stock could gain as its investment cycle matures.

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