Amazon Shares Fall 2.6% as Q1 Capex Jumps 77% on AI Spending
Amazon shares fell 2.6% in after-hours trading despite posting record Q1 EPS of $2.78 on $181.5 billion in revenue and 28% AWS growth, its fastest in 15 quarters. Free cash flow plunged to $1.2 billion as first-quarter capital expenditures surged 77% year over year to $44.2 billion for infrastructure and AI investments.
1. Record-Setting Q1 Performance
Amazon delivered Q1 EPS of $2.78 versus a $1.63 consensus and generated $181.5 billion in revenue, topping the $177.13 billion expected. Operating income reached a record $23.9 billion while advertising revenues exceeded $70 billion on a trailing-twelve-month basis.
2. AWS Accelerates Growth
Amazon Web Services grew 28%, its fastest pace in 15 quarters, with a $20 billion annual revenue run rate in its chips business and a $364 billion backlog supporting long-term cloud demand. CEO Andy Jassy highlighted triple-digit growth in proprietary chips and expansion of same-day delivery to over 1 billion items.
3. Infrastructure and AI Drive Capex Surge
Free cash flow declined to $1.2 billion over the trailing twelve months as capex increased by $59.3 billion year over year. In Q1 alone, purchases of property and equipment rose to $44.2 billion, a 77% jump driven by data-center buildouts and commitments to AI workload capacity.