AWS Growth Accelerates as Profit Hits Record High
Taiwan stocks opened lower and moved lower on October 30, closing down 1,156.5 points at 45,211.83, down 2.49%, with turnover reaching NT$877.73 billion. Amazon reported its Q3 2026 earnings, with revenue reaching US$201.9 billion, up 12% year-on-year, operating income of US$28.1 billion, and operating margin of 13.9%, a record high. Cloud service AWS revenue reached US$46.0 billion, up 39.3% year-on-year, the fastest growth in nearly 5 years, with annualized revenue reaching US$184.0 billion, showing continued expansion in AI and cloud business.
Free Cash Flow Turns Negative, Down US$57.15 Billion in a Year
Stock expert Ah Xun pointed out that higher corporate profit does not mean freely usable cash increased in tandem. Amazon's trailing 12-month free cash flow swung from positive US$14.79 billion a year ago to negative US$42.36 billion at the end of this year's third quarter, a difference of about US$57.15 billion. The main reason was rapidly increasing AI capital expenditure, with heavy investment bringing funding pressure to the company, a signal investors should watch.
Full-Year Spending at US$220 Billion, Rising Further in 2027
Amazon expects full-year 2026 cash capital expenditure of about US$220 billion, with the CEO saying investment could increase further in 2027, mainly for data centers, AI infrastructure and related equipment. In other words, to capture the AI market, Amazon must first invest massive funds to build data centers and purchase equipment. While expanding its cloud business and raising operating income, it still faces cash flow pressure in the short term.
Taiwan Supply Chain Benefits, Key Is Investment Payback
This wave of AI infrastructure investment is a bellwether for Taiwan's supply chain, from TSMC, AI servers, to cooling, power and high-speed transmission-related industries, all likely to benefit from cloud providers' continued expansion of capital expenditure. However, Ah Xun believes the focus should not be only on revenue growth or spending scale, but on future actual returns. After data center construction is completed, customer demand, equipment utilization rates and depreciation costs must be monitored. Market focus has shifted from who can invest the most capital to compete in AI, to who can convert AI investment into long-term stable cash flow, and AI concept stocks should be evaluated more on long-term profit monetization ability.