Amazon's Cloud Profits Come With A Growing Bill

AWS, Amazon's cloud business, is doing a lot of heavy lifting. Its share of Amazon's operating profit is much larger than its share of sales. Operating profit is earnings before interest and taxes.

Cloud is a big part of Amazon's earnings story. But expanding it takes cash. Over the twelve months ended September, investment in property and equipment grew faster than operating cash flow.

Amazon says AI is driving most of the spending increase. The question I'll be watching: will that investment produce profitable growth and stronger free cash flow over time?

September's spending increase looks different once we account for higher prices.

When retailers report, I'll be looking at how much growth came from more purchases, higher prices, or a different mix of products. That tells us more about demand than the sales total alone.

The Fed kept its target at 3.75–4%, while Treasury yields moved lower across the week.

Those market rates feed into borrowing costs and the returns we expect from an investment. They're worth watching alongside company results.

On my calendar this week, all times Eastern:

U.S. elections are Tuesday, too. As policy proposals develop, I'll be watching what they mean for the businesses we follow.