Amazon's (NASDAQ: AMZN) second-quarter earnings had investors on edge, fixated above all else on the company's capital expenditure (capex) outlook. This figure came in at roughly $220 billion for the full year, a meaningful increase from the previously stated $200 billion. According to management, higher memory costs are driving the surge.
The question hanging over Amazon's financials is whether such heavy spending can still be justified. During the earnings call, Amazon CEO Andy Jassy made some comments that offer a pointed answer.
Missed Nvidia in 2009? This Rare Signal Is Flashing Again. In 2009, a "Double Down" signal flashed for a little-known chipmaker called Nvidia. For the first time in years, that same "Total Conviction" signal is flashing for a company 1/100th the size of Nvidia. Continue »
Heavy capital spending and free cash flow are linked by a simple accounting equation. Free cash flow equals cash generated from operations minus capital expenditures. When Amazon accelerates investment in data center infrastructure and servers, capex rises and free cash flow compresses.
In the trailing 12 months that ended with the second quarter, Amazon's free cash flow swung to an outflow of $7.6 billion. The swing was driven by a $66.1 billion year-over-year increase in property and equipment purchases, the bulk of which was tied to artificial intelligence infrastructure.
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The question hanging over Amazon's financials is whether such heavy spending can still be justified. During the earnings call, Amazon CEO Andy Jassy made some comments that offer a pointed answer.
Missed Nvidia in 2009? This Rare Signal Is Flashing Again. In 2009, a "Double Down" signal flashed for a little-known chipmaker called Nvidia. For the first time in years, that same "Total Conviction" signal is flashing for a company 1/100th the size of Nvidia. Continue »
Heavy capital spending and free cash flow are linked by a simple accounting equation. Free cash flow equals cash generated from operations minus capital expenditures. When Amazon accelerates investment in data center infrastructure and servers, capex rises and free cash flow compresses.
In the trailing 12 months that ended with the second quarter, Amazon's free cash flow swung to an outflow of $7.6 billion. The swing was driven by a $66.1 billion year-over-year increase in property and equipment purchases, the bulk of which was tied to artificial intelligence infrastructure.
#NVIDIA
2 days ago
