Amazon is becoming Big Tech's king of cash, and Wall Street wants a piece of it

Cash Balance and Growth - Amazon's cash balance is expected to reach almost $400 billion by 2027, significantly outpacing its Big Tech rivals [1][4] - By the end of 2024, Amazon is projected to have $127.4 billion in cash and short-term investments, tripling its 2018 amount and surpassing $100 billion for the first time [2] - Amazon's cash balance will exceed rivals Alphabet ($112.8 billion) and Microsoft ($108.1 billion) by 2024, and even Apple is expected to fall behind by next year [3] Drivers of Cash Growth - The increase in cash is driven by record profits from cloud computing, advertising, and improved efficiency, including cost-cutting measures [6] - Free cash flow is expected to nearly double from $36.8 billion in 2023 to $70.8 billion in 2025 [7] Shareholder Returns and Investment Priorities - Wall Street is questioning whether Amazon will return some of its cash to shareholders through buybacks or dividends, as other Big Tech companies have done [4][7] - Amazon approved a $10 billion stock repurchase plan in 2022 but has not added to it since [7] - Analysts believe the chances of an Amazon dividend are "pretty low" for the next 2 to 3 years, with a sustained share buyback program being more likely [7] - Amazon's CFO stated that the company's priorities are growth opportunities, long-term investments, and debt repayment, with no immediate plans for shareholder returns [9] AI and Future Investments - Amazon is heavily investing in artificial intelligence, competing with Microsoft, Alphabet, OpenAI, and Meta [10] - Capital expenditures are expected to increase in the second half of 2024, following $30.5 billion spent in the first half [10] - AWS's growth rate has rebounded, and competition with Microsoft is intensifying, which may lead investors to support continued funding for AI and cloud initiatives [10] Stock Performance and Investor Confidence - Amazon's stock has risen roughly 40% in the past year, outperforming the broader market [9] - CEO Andy Jassy's turnaround efforts have resulted in record profits and renewed investor confidence [9]