Amazon Stock Soars as AI Investments Take Center Stage

Amazon shares rose 3.97% to $266.43 on Friday, adding about $110 billion of market value.

The gain was driven by the company's increased focus on artificial intelligence (AI), with Federal Reserve Chair Kevin Warsh stating that AI growth has been faster than expected.

Amazon Web Services (AWS) sales rose 37% to $42.2 billion in the second quarter, and its operating income reached $16.6 billion, or 60% of Amazon's total company results.

However, the increased investment in AI has come at a cost, with free cash flow turning negative for the first time in the trailing-12-month period, swinging from an inflow of $18.2 billion to an outflow of $7.6 billion.