Amazon’s AI-Driven Growth Comes at a Cost as Capex Weighs on Profit Forecast

Amazon's Q2 2025 earnings report reveals a mixed financial landscape. Revenue surged 13% year-over-year to $167.7 billion, beating expectations, while earnings per share jumped 33% to $1.68. AWS revenue grew 17% to $30.9 billion, meeting forecasts, and advertising revenue climbed 23% to $15.7 billion.

The tech giant's aggressive AI investments across AWS, Alexa, and robotics are paying dividends, with CEO Andy Jassy declaring the transformation of customer experiences has begun. Amazon forecasts Q3 sales between $174 billion-$179.5 billion, potentially marking 10-13% growth.

However, this expansion carries significant costs. Operating expenses rose 11% to $148.5 billion, while trailing 12-month free cash flow plummeted from $53 billion to $18.2 billion. The capital-intensive AI push mirrors trends in crypto markets, where infrastructure investments often precede profitability.