Amazon’s stock price performance hasn’t been particularly noteworthy lately. However, CEO Andy Jassy’s latest annual letter to shareholders reinforced our resolve to stick with this policy. Why: Amazon takes a lot of shots on goal, and the company’s track record suggests that our patience will be rewarded if enough shots go in the back of the net and we start seeing profits. Wall Street agreed, at least Thursday, with the stock up 4.5%. While encouraging, this rally only pushes the stock back to where it has been since the beginning of the year. Amazon’s attacks are coming from everywhere: the massive expansion of AI computing, faster and farther online deliveries, robots, and (literally) out-of-this-world internet services. Jassy’s letter Thursday included all of that. But the stock isn’t cheap, and that’s led to a steady overhang that has kept it lagging the broader market and most of its Magnificent Seven peers over the past two years. “I think this (poor performance) is going to change,” Jim Cramer said during Thursday’s morning meeting. “It’s one of the best-run companies in the world, and one day it’s going to be as big as Alphabet.” Alphabet, the owner of Google, YouTube, and the robotaxi service Waymo, was another tech giant whose stock price was in the doldrums, only to regain momentum last year after overregulation was lifted and the strength of its eclectic business, particularly the power of its artificial intelligence model Gemini, became impossible to ignore. Unfortunately, we exited the market too early last spring and were forced to return to the stock market at a higher price in December. Jim says this is a mistake and he’s going to learn from Microsoft as well as Amazon. For Amazon, investors’ biggest concern right now is its planned $200 billion in capital spending this year, which Wall Street expects will result in a negative free cash flow (FCF) of $11.47 billion in 2026, according to FactSet. To be clear, a negative FCF means a company is spending more cash than its operations generate in a given period of time. Amazon’s free cash flow remained positive last year at $11.19 billion, down from $38.22 billion in 2024. Most of that capital investment is going to AI data centers to support Amazon Web Services’ cloud business. Jassy provided a convincing defense of these spending plans in Thursday’s letter, reiterating that AWS monetizes new computing power “as fast as it is installed.” “We are not investing approximately $200 billion in capital expenditures in 2026 based on a hunch,” wrote Jassy, who has been CEO since July 2021, replacing founder Jeff Bezos. “While much of the AWS capital expenditures expected to be spent in 2026 will be monetized in 2027-2028, a significant portion of that is already in contract with customers,” Jassy added. Over its 30-year history, Amazon has made bold bets to transform itself from an online bookseller to the vast enterprise it is today, with a global network of profitable data centers, a grocery store chain, a movie studio, and a logistics network that handled more packages than the U.S. Postal Service in at least one year. Jassy acknowledged that not all of Amazon’s investments have worked out, and the path to success is not linear. But given the amount of AI spending, the CEO argued it’s necessary. “We are prepared to make significant capital investments and withstand near-term FCF headwinds to increase FCF surplus over the medium to long term. AI is a once-in-a-lifetime opportunity, current growth is unprecedented, and future growth will be even greater,” Jassy wrote. “We do not intend to be conservative in this effort. We are investing in becoming a meaningful leader, which will lead to even greater future business, operating income and FCF.” AI is a once-in-a-lifetime opportunity, current growth is unprecedented, and future growth will be even greater. …We’re not going to be conservative in how we play this. Amazon CEO Andy Jassy Jassy revealed that the company’s AI cloud business had an annual operating rate of $15 billion in the first quarter of 2026, which is likely the most concrete number the company has given to date about the size of the business. The Street expects total AWS revenue to be nearly $162 billion this year. When discussing other parts of Amazon’s business, Jassy highlighted investments in robotics to improve the speed and reduce costs of e-commerce deliveries. He also argued that Amazon’s efforts to expand its presence by serving rural America are worth paying for. This makes Prime membership even more attractive, and we agree. “Customer response has been overwhelmingly positive, with average monthly same-day ridership in rural areas nearly doubling in 2025 compared to the previous year,” he wrote. “Once this expansion is complete, our network will be able to deliver more than 1 billion additional packages each year to customers in more than 13,000 ZIP codes across 1,200,000 square miles.” Jassy highlighted how these investments align with Amazon’s satellite internet ambitions, ahead of the expected mid-year launch of the company’s Leo service, which rivals SpaceX’s Starlink. “Billions of people around the planet lack access to high-speed internet, and millions of businesses, governments, and other organizations operate in locations without reliable connectivity,” he wrote. But building a network of low-Earth orbit satellites is quite expensive, and the company has also faced questions about this spending in recent years. But Jassy says Amazon Leo (formerly Project Kuiper) could become a lucrative business for the company, benefiting both the e-commerce side and AWS. After all, anyone who uses the Internet will need computing power from somewhere. The bottom line? Investors need to be patient with Amazon stock while these investments play out, as the profits will eventually follow. If you give up at this point, you may make a big mistake. (Jim Cramer’s charitable trusts are long AMZN, MSFT, and GOOGL. See here for a complete list of stocks.) As a subscriber to Jim Cramer’s CNBC Investment Club, you will receive trade alerts before Jim makes a trade. After Jim sends a trade alert, he waits 45 minutes before buying or selling stocks in his charitable trust’s portfolio. If Jim talks about a stock on CNBC TV, he will issue a trade alert and then wait 72 hours before executing the trade. The above investment club information is subject to our Terms of Use and Privacy Policy, along with our disclaimer. 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