CEO Andy Jassy noted Amazon’s massive AI spending reflects a once-in-a-generation opportunity and will ultimately drive stronger long-term growth and returns.

He argued investors are overlooking how Amazon invests ahead of demand, noting profits and cash flow typically follow once infrastructure is fully utilized.

Andy Jassy commented Amazon’s massive spending on artificial intelligence isn’t something investors should fear — it’s exactly why they’ll be rewarded over time.

“We believe that AI is the biggest software transformation in our lifetimes,” the CEO remarked on “Mad Money.” “It’s going to reinvent every single customer experience we know and altogether fresh ones we never imagined.”

In February, Amazon declared plans to invest $200 billion this year in capital expenditures, largely tied to AI infrastructure. The disclosure alongside fourth-quarter earnings sent shares tumbling. It took roughly two months for the stock to erase all of its post-earnings declines in early April. It has kept climbing higher since then, setting a latest record close Monday. This also touches on aspects of dividends.

The crux of the debate surrounding the stock: Will Amazon be able to generate meaningful returns from all this spending? Skeptics also note that Amazon is projected to have negative free cash flow in 2026, according to FactSet.

Jassy argues that scale of spending reflects just how massive the opportunity is. He pointed to the sheer pace of growth of its cloud unit, Amazon Web Services, as evidence that the corporation is investing in the right place.

“After the first three years of this incarnation of AI, our run rate is over $15 billion — 260 times what it was the first three years of AWS,” he noted. AWS is expected to generate total revenue of roughly $166 billion this year, according to FactSet.

“When you have shifts that are this momentous … you want to bet big,” added Jassy, who used to lead Amazon’s cloud unit before replacing Jeff Bezos as companywide CEO in 2021.

Jassy specifically pushed back on the cash flow concerns, saying critics misunderstand how Amazon makes wealth from these investments. “We have to lay out capital and cash in advance of when we can monetize it,” he commented, explaining that investments in data centers and infrastructure are made years before they generate revenue.

Those assets, have multiyear long lifespans, Jassy commented, allowing Amazon to generate returns over an extended period.

“When your revenue growth starts to catch up with the capital expenditure growth, you actually end up really liking the operating margin, the free cash flow, and the , on the other hand[return on invested capital],” Jassy stated. “We’ve lived this movie once before in the first wave of AWS … and I think the same story is going to play out, except with much larger revenue and free cash flow downstream.”

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