Amazon's elevated 2026 capital expenditure guidance, now at approximately $220 billion after a July upward revision from $200 billion, stems primarily from surging demand for AWS infrastructure supporting AI workloads, including higher memory chip costs. In Q2 2026, purchases of property and equipment reached $54.2 billion, contributing to trailing twelve-month free cash flow turning negative at $7.6 billion despite operating cash flow of $161.4 billion and AWS revenue growth of 36.7% to $42.2 billion with a $496 billion backlog. This spending trajectory, focused on data centers, servers, and related assets, reflects broader hyperscaler competition in AI buildouts and has pressured near-term valuations while management signals capacity shortfalls persisting into 2027. Traders will monitor Q3 results for any further revisions or updates on monetization timelines.