Amazon increases 2026 capital spending projection to $220 billion

Amazon is significantly increasing its capital expenditure to support artificial intelligence and cloud infrastructure, with projected spending for 2026 reaching $220 billion. This massive investment has caused the company's annualized free cash flow to turn negative, falling to -$7.6 billion, primarily due to a $66.1 billion year-over-year increase in net property and equipment purchases.

Despite the financial pressure, demand for Amazon Web Services (AWS) remains high. AWS reported 37% revenue growth in the second quarter and maintains a contract backlog of $496 billion. The company is currently navigating challenges related to power shortages, equipment constraints, and construction hurdles as it attempts to expand computing capacity.

Data from the 2026 Prime Day event further highlights the scale of AWS operations. During the four-day sale in June 2026, most cloud services saw significant increases in load compared to the previous year. For instance, GuardDuty monitored log volumes rose by 59%, and ElastiCache daily requests at peak increased by 53% to 2.3 quadrillion.