Amazon’s 2026 capital expenditure guidance centers on aggressive AI infrastructure spending, with management raising the cash capex target to approximately $220 billion in July from an earlier $200 billion figure due to elevated memory and component costs. This follows 2025 capex of $131.8 billion and reflects sustained AWS demand, evidenced by 36.7% year-over-year revenue growth to $42.2 billion in Q2 and a $496 billion backlog of committed revenue. Quarterly property and equipment purchases reached $54.2 billion in the period, driving trailing twelve-month free cash flow negative at $7.6 billion. Traders monitor whether further cost inflation or capacity expansions push actual spending above the current guide, with Q3 earnings and any updated outlook serving as key near-term catalysts amid broader sector AI buildouts.