Amazon crossed a $3 trillion market value for the first time on Aug. 3, joining Nvidia, Apple, Alphabet, and Microsoft in that club — but it remains the only one of the five that has never paid a dividend. The gap traces to about $220 billion in planned capital spending this year, which has pushed free cash flow into negative territory even as AWS revenue and profit accelerate.
Four payers and a holdout
Five companies now carry market values around $3 trillion or more, and Amazon reached that mark on Aug. 3, the last of the group to arrive. Microsoft, Apple, and Nvidia already pay dividends, and Alphabet became the group's newest payer when it initiated its first-ever dividend in April 2024 alongside a $70 billion buyback authorization.
Amazon returns nothing to shareholders in any form. Its lone buyback program, a $10 billion authorization from March 2022, has sat idle, with no shares repurchased in 2023, 2024, or 2025 and $6.1 billion of it still available at the end of last year. For dividend-focused investors, that likely won't change for years.
The cash is spoken for
Management expects about $220 billion of capital expenditures this year, most of it aimed at AI and cloud capacity, up from a $200 billion estimate as recently as February. Net cash spending on property and equipment climbed from about $48 billion in 2023 to about $78 billion in 2024 and about $128 billion in 2025.
That spending now outpaces what the business brings in. Operating cash flow rose 33% year over year to $161.4 billion over the trailing 12 months, yet free cash flow swung to an outflow of $7.6 billion over the same stretch, compared with an inflow of $18.2 billion a year earlier. Alphabet, by contrast, generated about $69 billion of free cash flow in 2023, the year before it started paying a dividend.
CEO Andy Jassy told investors on the July 30 earnings call that even $220 billion won't buy enough capacity to meet this year's demand, and that he expects the same to hold in 2027.
AWS growth is funding the bet
The build-out is showing up in results. AWS revenue rose 37% year over year to $42.2 billion in the second quarter, growth management called its fastest in 18 quarters. According to Jassy: "each eclipsed run rates of more than $25 billion", referring to Amazon's AI and chips businesses.
Operating income climbed 43% year over year to $27.5 billion in the second quarter, with AWS contributing $16.6 billion of that. Net income more than tripled to $62.6 billion, though most of the increase came from $53.4 billion of non-operating income, primarily gains tied to Amazon's Anthropic investments.
Shares trade around $276 as of this writing, about 4% off their record high, or about 30 times the earnings analysts expect over the next 12 months. The missing dividend isn't a matter of stinginess — it reflects a bet that a dollar of AI capacity earns more than a dollar of payout ever could.
Source: Fool
Trading involves risk.
Risk Disclaimer
