Amazon Rises 4.7% in 5 Days as AI Spending Clouds Cash Flow
Updated
Updated · Trefis · Jul 17
Amazon Rises 4.7% in 5 Days as AI Spending Clouds Cash Flow
1 articles · Updated · Trefis · Jul 17
Summary
Amazon shares gained 4.7% over the past five trading days, beating the S&P 500’s 1.2% rise after the company rolled out Prime summer discounts and backed humanitarian relief flights.
That rally masks a stock that still moves largely with the broader market: Amazon’s five-year correlation with the S&P 500 is 0.71, making it more a concentrated market bet than a diversifier.
Its swings are also sharper. Over the past year, Amazon captured about 133% of the market’s up days but 153% of its down days, amplifying losses more than gains.
AWS, which management says has reached a $150 billion annualized revenue run rate, underpins the bullish case, but heavy AI investment has pushed free-cash-flow margin to negative 0.3% versus the S&P 500 median 14.6%.
For investors, the key test is whether that spending starts producing positive free cash flow, which would show Amazon’s AI buildout is beginning to pay off.