Amazon’s AI Spending is Pressuring Free Cash Flow. Is the Stock Still a Buy?

Amazon is investing heavily in AI infrastructure with $220 billion in capital spending forecasted for the year, creating pressure on free cash flow. Despite reporting negative free cash flow of $42 billion for the trailing 12 months, AWS revenue surged 39% to $46 billion quarterly. The company argues this spending is necessary to maintain AI leadership, and with Amazon stock trading at 23x forward earnings, analysts view it as a buy-and-hold opportunity given strong e-commerce and cloud fundamentals.