Amazon's Logistics Empire Goes Public as $200 Billion AI Bet Reshapes the Balance Sheet

Amazon opens logistics network to all businesses, mirroring AWS model, as Q1 profit doubles to $30.3B but free cash flow plunges on $200B AI spend.

The playbook is unmistakable. Amazon is taking what it built for itself and selling it to the world — this time, it’s not cloud computing but the physical movement of goods. The company has launched Amazon Supply Chain Services (ASCS), opening its vast transportation network to external businesses regardless of whether they sell on Amazon’s marketplace. Procter & Gamble, 3M, and American Eagle Outfitters have already signed on.

Peter Larsen, the vice president overseeing the new division, draws a direct line to AWS. Just as Amazon turned its internal server infrastructure into a global cloud standard, it’s now doing the same with logistics. The assets being unlocked are staggering: more than 80,000 semi-trailers, roughly 24,000 intermodal containers, and a fleet of over 100 cargo aircraft. External clients gain access to this entire portfolio — air, land, and sea freight — through a centralized dashboard.

The timing is no coincidence. Amazon reported first-quarter 2026 net income of $30.3 billion, nearly double the $17.1 billion from a year earlier. But that headline number comes with a significant asterisk: $16.8 billion of it stems from a non-operational revaluation of its Anthropic stake — an accounting gain that doesn’t generate cash. Strip that out, and the picture shifts dramatically.

Free cash flow over the trailing twelve months has collapsed to $1.2 billion, down from $25.9 billion a year ago. The culprit is a $200 billion capital expenditure budget for 2026, almost entirely directed at AI infrastructure and new data centers. Amazon is burning cash to build the future, and investors are betting it will pay off.

The market has rewarded the strategy handsomely. Amazon shares hit a new 2026 high of €229.25 on Monday, pushing year-to-date gains to nearly 19%. The stock now trades comfortably above its moving averages. Analysts are piling on with upgraded targets: JPMorgan raised its price target to $330 from $280, Bank of America to $310, UBS to $333, and Goldman Sachs to $325.

AWS remains the engine driving this optimism. The cloud division generated $37.6 billion in revenue during the first quarter, a 28% year-over-year increase — the fastest growth in 15 quarters. Operating margins hit 37.7%. Meanwhile, Amazon’s in-house chip business has quietly become a powerhouse. Its portfolio includes Graviton for general computing, Trainium for AI training, and Nitro for networking. Meta is using tens of thousands of Graviton cores for its AI workloads, and Anthropic has committed to purchasing up to five gigawatts of Trainium capacity over the next decade. Total commitments for Trainium chips now stand at $225 billion — not letters of intent, but locked-in capital.

Retail is also firing on all cylinders. Unit sales grew 15%, the fastest pace since the pandemic lockdowns. Advertising revenue contributed $17.24 billion, up 24%. Amazon reported delivering more than one billion packages on the same or next day so far this year.

But the clock is ticking on a separate front. By July 30, Amazon must have deployed roughly 1,600 satellites for its Kuiper broadband network or risk losing its FCC license. The company is also deepening its government ties: AWS recently secured strategic contracts with the U.S. Department of Defense to operate AI tools within classified networks, positioning itself as a primary supplier for secure government infrastructure.

For the second quarter, Amazon forecasts revenue between $194 billion and $199 billion, with Prime Day — now scheduled for the first time in Q2 — expected to provide a traditional boost to retail margins. The logistics expansion, the chip empire, the AI spending spree, and the satellite deadline all converge on a single question: Can Amazon execute on all fronts simultaneously without breaking its balance sheet?