Hyperscalers in Trouble: Amazon vs Meta's Cash Flow Struggles

Amazon and Meta, two of the world's largest hyperscalers, reported their second-quarter results in late July. Both companies are facing pressure from the increasing demand for AI infrastructure, which is consuming cash.

Amazon spent $53.1 billion on capital expenditures (capex) in a single quarter, while Meta spent $31.1 billion. The question is which giant faces the bigger cash flow problem.

AWS, Amazon's cloud computing division, carried the company's quarter with a 36.7% year-over-year growth to $42.2 billion, the fastest pace in 18 quarters. AWS backlog reached $496 billion, and Andy Jassy reported that AI and chips each cleared $25 billion run rates with triple-digit growth.

Meta's revenue rose 27.96% to $60.8 billion, but operating income fell 8.15%, compressing the margin from 43% to 31%. Meta's EPS of $6.18 came in 14.42% below expectations.