Amazon lays out some of this cash about two years before it can make money from the capacity. That is the part I keep coming back to. AWS is growing fast now, but demand can change a lot in two years.
The two-year lead time is absolutely the core risk of the AWS model, but Amazon de-risks this in two ways. First, the $496 billion backlog represents signed, multi-year commitments, meaning they are building capacity for demand that is already locked in. Second, cloud infrastructure is highly flexible. If AI demand shifts in two years, that server capacity and power can easily be repurposed for core database and enterprise software workloads. In short: Amazon faces a short-term cash drag, but its long-term utilization is structurally protected.
The market just voted on the capex question, +15% on the print. What I'm watching now is whether $AMZN holds the gap while $QQQ sits under its 50-day with 8 distribution days on the count. If the spend keeps flowing, memory is the follow-on trade. $MU just put in its first higher low in the broken group.
Amazon lays out some of this cash about two years before it can make money from the capacity. That is the part I keep coming back to. AWS is growing fast now, but demand can change a lot in two years.
The two-year lead time is absolutely the core risk of the AWS model, but Amazon de-risks this in two ways. First, the $496 billion backlog represents signed, multi-year commitments, meaning they are building capacity for demand that is already locked in. Second, cloud infrastructure is highly flexible. If AI demand shifts in two years, that server capacity and power can easily be repurposed for core database and enterprise software workloads. In short: Amazon faces a short-term cash drag, but its long-term utilization is structurally protected.
The market just voted on the capex question, +15% on the print. What I'm watching now is whether $AMZN holds the gap while $QQQ sits under its 50-day with 8 distribution days on the count. If the spend keeps flowing, memory is the follow-on trade. $MU just put in its first higher low in the broken group.