I Keep Buying Amazon Because AI Capex Fears Were Never Real From The Start
This financial analysis argues that fears over Amazon's $200 billion 2026 capital expenditure (capex) are unfounded, as the company has a massive pre-sold contract backlog. The article highlights Amazon Web Services' (AWS) $364 billion backlog and $225 billion in Trainium chip commitments, which dwarf the capex figure. AWS grew 28% year-over-year in Q1 2026, outpacing Microsoft (18%) and Alphabet (22%), yet trades at a similar P/E ratio. Amazon's custom Trainium chip business has crossed a $20 billion annual run rate, providing a structural cost advantage over competitors. The author acknowledges risks, including a 95% drop in trailing twelve-month free cash flow to $1.2 billion and rising long-term debt, but maintains a bullish stance on Amazon's AI monetization prospects.
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