Amazon's Free Cash Flow Plunges 95% Even as Satellite Internet Reaches Critical Mass and AI Spending Soars
Published on 07/08/2026 at 15:55 | Redaktion boerse-global.de
Amazon is laying out capital at a pace that would test any corporate balance sheet, pouring $25 billion into a bond sale to fund data centers while simultaneously pushing its satellite internet fleet past a key milestone. The cost of that dual-pronged ambition landed squarely in the company’s cash-flow statement, which took a 95% hit.
Free cash flow dropped to $1.2 billion in the latest period, down from levels that had investors accustomed to a torrent of liquidity. The culprit is a spending spree that Amazon now pegs at roughly $200 billion through 2026, up from $131 billion the prior year. That envelope covers both the custom chips and AI infrastructure powering AWS and the 7,700-strong satellite constellation — Project Kuiper — now beginning to generate commercial revenue.
A $25 Billion Bond That Struggled to Find a Home
Amazon tapped the debt market this month with a $25 billion issuance across multiple tranches, the longest stretching 40 years. A syndicate led by JPMorgan and Goldman Sachs marketed the bonds, but the reception was notably cooler than the typical corporate deal. Final orders reached $41 billion, a 1.6-times oversubscription ratio — well below the 4-times average for US investment-grade bonds this year.
To close the gap, Amazon was forced to offer wider credit spreads than it had initially signaled, a sign that even for a triple-A name, the flood of AI-related debt is saturating the market. The company said it has no further issuance planned for the rest of this year. Total debt has already climbed past $100 billion, and interest expenses are rising in lockstep.
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396 Satellites and a Commercial Countdown
On the space front, Amazon launched another 29 satellites aboard an Atlas V rocket this week, bringing the total in low-Earth orbit to 396. Chris Weber, who leads the satellite business, confirmed that the fleet has now reached a density sufficient to offer continuous coverage in some geographic bands. Until now, only select corporate testers had access; the company is preparing to roll out commercial packages for households and public-sector customers later this year.
The expansion pace will remain aggressive as Amazon pushes toward a final target of roughly 7,700 spacecraft. Each successful launch chips away at the dominance of SpaceX’s Starlink network, which has held an effective monopoly in satellite broadband. The commercial launch later this year will serve as the first major public test of whether Kuiper can deliver real competition.
Analysts Look Past the Squeeze
Despite the immediate pressure on liquidity, Wall Street remains broadly bullish. Bank of America reiterated its Buy rating with a price target of $310, pointing to AWS’s unassailable position in the cloud market. The unit’s order backlog, standing at $364 billion, must start converting into faster revenue growth to justify the mountain of debt. Amazon reports second-quarter earnings at the end of July, and investors will be watching for evidence that the backlog is accelerating.
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The stock, meanwhile, has been treading water. It closed Tuesday at €215.50, sliding just below its 50-day moving average. On the day of the bond sale it edged down to €213.65. Even so, the shares are up roughly 10% since the start of the year — a modest gain that reflects both the promise of AWS and the caution sparked by the cash-burn trajectory.
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