Amazon (AMZN.US) follows Google in after-market plunge! Free cash flow turns negative by $42.4 billions, AI capital expenditure is dragging cloud giants into the same storm

Zhihu Finance APP reported that after the U.S. stock market closed on Thursday (Eastern Time), Amazon (AMZN.US) released its financial report for the third quarter of fiscal year 2026: its operating profit margin reached a record high of 13.9%, AWS revenue soared 39.3% year-on-year—marking the fastest growth in nearly five years, but its single-quarter capital expenditure reached $77.26 billion, far exceeding Wall Street expectations. Over the past twelve months, free cash flow turned negative, with an outflow of $42.4 billion, and management has signaled that spending will "increase significantly" in 2027. Dragged by this news, Amazon’s share price fell by more than 11% after hours. Just the previous trading day, Alphabet (GOOGL.US), Google’s parent company, also saw its largest single-day drop since its IPO due to a similar “AI-capex eating up cash flow” issue. These two sharp declines formed a resonance, and the market is now repricing “AI massive capital expenditure” from “fuel for growth” to “a questionable burden on returns”—with the impact spreading from individual stocks to the entire AI infrastructure supply chain.