Amazon has arranged up to $80 billion of secured supplier financing for technology infrastructure, after free cash flow was a $34.8 billion outflow in the third quarter as capex reached $77.3 billion. The facility lets Amazon borrow against hardware it buys from early 2027 through the third quarter of 2028, and lenders receive collateral rights over some of those assets. Amazon’s total debt, including leases, nearly doubled over the past year to $305 billion by the end of September. Chamath Palihapitiya argued that AI companies’ funding needs through 2027 equal 30% of what the Treasury will issue in that period, and that if investors favor government debt, large borrowers like Amazon could pay higher rates. AWS grew 39% to $46.0 billion last quarter.
Summary written by Upside AI from the original article. Read the source for full details.
Read the original on Yahoo Finance ↗
Keywords
AMZNbondsAI investmentinterest ratesdata centers
Open a keyword to see other news on the same topic.
Related tickers and likely impact
AMZN
▼ Likely negativeAmazon
Relevance: medium
| Market | US stocks |
|---|---|
| Sector | Consumer Discretionary |
| Industry | Broadline Retail |
| Market cap | $2.6T |
| Close on 11/02/2026 | 245.63 |
| Change that session | +2.20% |
Impact is scored by AI from the headline and may be wrong. It is not investment advice.
Related news
- Will Interest Rates or Chips Decide the AI Trade?
On October 19, Jim Cramer said on Mad Money that investors should focus more on interest rates than on whether GPUs hold their value, and set a warning level at a 30-year Treasury yield above 6%. The 30-year yield closed at 5.48% that day, after reaching 5.67% on October 7. The article cites rising pressure on AI infrastructure: Oracle's interest expense rose 55% to $1.4 billion in fiscal Q1 2027 with free cash flow of −$5.4 billion, and Equinix expects its blended cost of capital to rise about 150 basis points. Panelists also flagged a duration mismatch, with long-term debt backed by contracts customers can walk away from, as when Microsoft vacated a UK lease that Anthropic reportedly took over. Nvidia's finance chief projected top-five hyperscaler capex of nearly $800 billion in 2026 and $1.3 trillion in 2027, so a growth slowdown could hit stock prices hard.
- AI Trade Is at a Critical Moment As Rising Rates Threaten a Capex Slowdown
James Russo, a portfolio manager at AllianceBernstein, says the AI trade is at a “critical moment” as corporate bond rates rise, making companies less willing to borrow for AI spending and putting AI infrastructure stocks in a perilous position. Causes include surging Treasury yields driven by oil prices, inflation concerns and ballooning government debt, along with heavy borrowing to fund the AI buildout. Bond yields on CoreWeave hit 15% last week amid concerns about its debt levels. Russo expects a significant slowdown in capex growth in 2027 and further deceleration in 2028, with hyperscalers estimated to spend $725 billion in 2026 and potentially up to $1.2 trillion. Upcoming third-quarter earnings reports from hyperscalers could reveal changes in their capex plans.
- AI Debt Warning Signs Are Piling Up: Why Bond Markets Are Getting Nervous About AI Infrastructure Spending
AI spending is running well ahead of revenue, so more companies are borrowing to build data centers and buy chips, and bond investors are growing nervous about whether and when they will see a return. CoreWeave's five-year credit default swap (CDS) spread, the cost of insuring its debt against default, hit a record of about 1,195 basis points, meaning $119,500 a year to insure $1 million of debt, and some of its bonds traded near 80% of face value with the October 2031 bond yielding 16%. Oracle's five-year CDS neared 300 basis points, a company record, after S&P Global cut its rating to one notch above junk. Bonds tied to Meta's Hyperion data-center project fell to around 91 cents on the dollar, and SoftBank's five-year CDS rose 24 basis points to 424. The article adds that oil-driven inflation has pushed the 10-year Treasury yield to roughly 5%, making borrowing costlier, while it remains unclear whether these projects will generate enough revenue to cover their costs.
- Amazon is on a course to spend half a trillion dollars in a single year: JPMorgan
JPMorgan tech analyst Doug Anmuth projects Amazon's capital expenditure will reach 395 billion USD in 2027, up 77% year over year, and 476 billion USD in 2028, up 20%, as he expects capex growth not to slow next year. He argues management's strong visibility into demand gives it confidence to underwrite growth above 40% over the next two years and to invest even more aggressively in AI infrastructure. Amazon itself estimated 2026 capex at 220 billion USD, while CEO Andy Jassy said 2027 spending would be 'meaningfully more' without giving a figure. Trailing 12-month free cash flow turned to a 42.4 billion USD outflow, driven by a 94.8 billion USD year-over-year increase in property and equipment purchases, mainly for AI. Shares fell over 1% on Friday before rebounding Monday, lifting year-to-date gains to 9% versus 11% for the S&P 500.
- Amazon.com (AMZN) Secures $80 Billion For AI Buildout And Targets 75% Automation
Amazon has secured an US$80 billion supplier loan facility to fund large-scale AI infrastructure spending. The company is pursuing extensive robotics deployment across its fulfillment network, with an internal target to automate 75% of fulfillment operations. Management is pairing heavy AI capital expenditure with automation-focused cost control, while the business continues to report persistent negative free cash flow. The article notes that analysts flag risks around very large quarterly cash capex and reliance on debt financing while free cash flow remains negative.
- Amazon Is Borrowing Against Its Own Data Center Gear to Fund More Data Centers
Amazon disclosed in its third-quarter 10-Q a secured loan facility of up to about $80.0 billion, backed by data center equipment, a financing tool it had never used before. Borrowings can be drawn at its discretion from Q1 2027 through Q3 2028 at variable rates, and none has been drawn yet. Trailing-twelve-month operating cash flow rose 29% to $168.3 billion, but free cash flow was an outflow of $42.4 billion, while Andy Jassy expects 2026 cash capex of about $220 billion. Long-term debt reached $173.1 billion as of September 30, up from $65.6 billion at the end of 2025. Still, AWS revenue grew 39% to $46.0 billion in the quarter, with a backlog of $578 billion.
Related markets
Latest news
- Why I Still Wouldn't Buy Nike Stock in November
Nike's dividend yield is 4.2%, but the author argues that more factors than yield need to be considered. For fiscal 2027 first quarter, revenue fell 4% to $11.2 billion and net income dropped 2% to $712 million, while Nike announced a restructuring plan that may lead to layoffs and forecast a high-single-digit percentage revenue decline for the full year. The stock is down about 39% so far in 2026. Still, Nike has paid and increased its dividend for 24 consecutive years, and the CFO stressed that the dividend is a significant priority. The author still does not consider Nike a suitable choice for new positions in November or for the rest of the year, as the market continues to view it as a growth stock and a falling share price could erode the dividend's appeal.
- What analysts are saying as Apple's stock falls after earnings report
Apple shares fell 4.5% in premarket trading as investors were disappointed by the company's gross margin outlook and slowing growth in services revenue.
- North Korea Denies $6.3B Binance Hack, Calls FBI Finding a 'Political Provocation'
North Korea has denied involvement in the Binance hack, with Kim Yo Jong calling U.S. accusations a “sinister” attempt to damage the country's image and criticizing the Trump administration's plan to use confiscated crypto as a strategic reserve. The FBI attributed the theft to TraderTraitor, the group it also blamed for the $1.5 billion Bybit hack in February 2025, with about $2.85 billion of the $6.43 billion stolen frozen or seized. The funds are being laundered across about 12,000 wallets, with a new wallet created roughly every 25 seconds. Binance said net withdrawals reached $4.72 billion since withdrawals resumed on Sunday, hourly deposits exceeded withdrawals by late Monday, and it has covered about 95% of stolen assets.
- Why Palantir stock doesn't deserve to be caught up in the AI stock meltdown
Palantir (PLTR) shares fell about 6% in premarket trading on Tuesday, though analysts largely defended the stock after a third-quarter report that beat expectations. Revenue growth accelerated to 96% from 93% last quarter, US commercial sales rose 148% year over year, and commercial revenue surpassed government revenue for the first time. Palantir raised full-year adjusted operating profit guidance by $354 million to $5.247 billion and free cash flow guidance by $300 million to $4.9 billion. D.A. Davidson's Gil Luria called Palantir the best story in software, while Yorkville Ives' Dan Ives said 2027 is the inflection year for AI monetization and that Palantir remains his top pick in software.
- IonQ vs. Rigetti Computing: Which Is the Better Quantum Computing Stock to Own for the Next 5 Years
The article compares IonQ, which uses trapped-ion technology, with Rigetti Computing, which uses superconducting qubits. IonQ unveiled a 256-qubit computer this year, aims for two million qubits by 2030, and reached 99.99% two-qubit gate fidelity; its second-quarter revenue soared 287% to $80 million. Rigetti's Cepheus-1-108Q operates at a 60-nanosecond gate speed and its latest revenue rose 185%, but more than 90% of its revenue comes from government contracts, and it targets 1,000 qubits within three years. Both stocks have fallen more than 30% this year. The author judges IonQ the better option for the next five years, citing lower risk, strong growth and $3 billion in cash.
- US Stock Futures Trade Mixed Premarket As AAPL Margin Concerns Weigh On Tech — PLTR, AMD, AEHR In Focus
U.S. stock index futures traded mixed before the open as investors weighed Apple's (AAPL) earnings ahead of the midterm elections. Apple fell 4.5% after indicating its gross margin would remain under pressure from surging memory chip prices, even though overall revenue and iPhone sales topped expectations. Palantir (PLTR) dropped more than 5% despite adjusted earnings of $0.44 per share beating the $0.41 consensus, while Aehr Test Systems (AEHR) jumped 15.5% after posting record revenue of $33 million, up 200% from a year earlier. Oracle (ORCL) rose 0.4% after announcing plans to raise $20 billion through equity and bond offerings, and Brent crude gained more than 1.3% to $106.13 a barrel after reports of a U.S. strike on Iran's Qeshm Island.
Get the briefing on Telegram or Zalo
Join the Upside Telegram channel or Zalo group for the Vietnam stocks and gold briefing at 8:00 and 19:00 (Vietnam time) on trading days, plus a weekly wrap on Saturday morning.