Amazon.com Inc. (AMZN) has recently come under scrutiny as financial expert Jim Cramer shared his thoughts on the company's diminishing free cash flow. In a post on X early Wednesday, Cramer remarked, "Amazon is difficult to own because it has diminished free cash flow from debt… I say stay in it but I know it went from cheap to expensive for a lot of people after that last quarter."
This commentary arises amid a significant decline in Amazon's free cash flow throughout 2025 and into early 2026, primarily attributed to increased capital expenditures related to artificial intelligence infrastructure and cloud expansion.
Recent reports indicate a dramatic downturn in Amazon's free cash flow, with figures as follows:
A Dramatic Free Cash Flow Decline
Period
Free Cash Flow (TTM)
Year-Ago Comparison
Q1 2025: $25.9B vs. $50.1B
Q2 2025: $18.2B vs. $53.0B
Q3 2025: $14.8B vs. $47.7B
Q4 2025: $11.2B vs. $38.2B
Data Source: Quarterly Results
Amazon’s cash flow contraction is a direct result of its decision to invest heavily in AI infrastructure, with plans to increase capital expenditures to approximately $200 billion in 2026, marking a $70 billion rise from the previous year.
Interestingly, Cramer has shifted his view on the major tech players, having previously stated that the "Magnificent 7" is no longer relevant. While he continues to support Amazon, he has recently identified Alphabet Inc. (GOOGL) as the standout performer among mega-cap tech companies due to its own aggressive AI investments.
For those keeping an eye on market dynamics, the Benzinga Edge scorecard for Amazon highlights some critical strengths and weaknesses:
- Value: Weak (Score: 58.94) — The stock is trading at a premium relative to its peers.
- Quality: Strong (Score: 71.7) — Demonstrates robust financial health and profitability.
- Momentum: Weak (Score: 14.69) — Stock is underperforming the broader market.
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