Jim Cramer Says Amazon and Alphabet Are Cheap. Their Cash Flows Complicate the Case
Yahoo Finance ·
Jim Cramer Says Amazon and Alphabet Are Cheap. Their Cash Flows Complicate the Case Habib Ur Rehman Tue, September 8, 2026 at 7:10 PM EDT 3 min read AMZN GOOG Jim Cramer thinks investors have neglected two familiar AI giants. In his September 3 CNBC commentary, he argued that Amazon.com, Inc. (NASDAQ: AMZN ) and Alphabet Inc. (NASDAQ: GOOGL ) looked cheap as investors favored other winners. His thesis: enormous AI investments could begin delivering substantial returns. His charitable trust owns both stocks. The latest results support the growth argument. They also show why investors should distinguish earnings from cash available after building the infrastructure that produces that growth. A lower earnings multiple can flatter a stock when investment gains lift the denominator. That distinction matters even when the underlying businesses are expanding rapidly. But its June-quarter filing shows a different cash picture. Trailing twelve-month operating cash flow reached $161.4 billion, while net property-and-equipment purchases reached $169 billion. Free cash flow was consequently negative $7.6 billion. The quarter also included roughly $50.5 billion of upward adjustments to Amazon's Anthropic nonvoting preferred stock. Alphabet Inc. (NASDAQ:GOOGL) has a similarly credible operating bull case. Its second-quarter release showed Google Cloud revenue rising 82% to $24.8 billion, while companywide operating income increased 30%. Search and YouTube give it substantial existing distribution and monetization alongside cloud demand. The bear case is the price of sustaining that expansion. Quarterly capital expenditure of $44.9 billion exceeded operating cash flow of $39.1 billion. Alphabet also reported $98 billion in other income, predominantly unrealized equity-investment gains. Treating that windfall as ordinary operating earnings would exaggerate its apparent cheapness. Neither company has to stop investing for the thesis to work, but future cash returns must justify today's outlays. Insider Monkey tracked 369 Amazon holders at June 30 versus 353 at March 31, and 275 Alphabet holders versus 265. Fisher Asset Management increased Amazon shares approximately 2.3% to 34,978,432 and Alphabet Class A shares approximately 2.4% to 39,989,840. These historical filings establish positioning, not the manager's reasons. Amazon's August 14 short interest was 95,300,129 shares, 0.97% of float, with 2.3 days to cover. The investment decision rests on future cash generation, rather than assuming either a low-looking earnings multiple or rising cloud sales alone proves a bargain. While we acknowledge the potential of AMZN and GOOGL as investments, we believe certain other AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock . READ NEXT: NVIDIA (NVDA): What Foxconn and Super Micro Are Telling Us about the AI Boom and Pony AI Is Scaling Robotaxis Fast—Can the Stock Reach BofA's $17 Target? Disclosure: None. Follow Insider Monkey on Google News .
AI 시장 분석
CNBC's Jim Cramer noted that the valuations of Amazon and Alphabet are attractive, but massive capital expenditures for giant AI infrastructure are pressuring cash flow. Indeed, Amazon's trailing 12-month free cash flow hit -$7.6 billion, while Alphabet's quarterly capital expenditures reached $44.9 billion. Investors must closely examine future cash generation capabilities rather than just earnings multiples or cloud growth.
상승 영향
- AI — Amazon and Alphabet possess the potential to generate substantial long-term returns through massive AI infrastructure investments, and their growth has been proven with a surge of 82% in Google Cloud revenue.
하락 영향
- Growth Stocks — Financial burdens are increasing as massive capital expenditures for AI infrastructure expansion exceed operating cash flow, resulting in Amazon recording a free cash flow of -$7.6 billion.
DYAX 전담 분석
Amazon and Alphabet are executing investments that exceed operating cash flow due to massive capital outlays for AI infrastructure building, acting as a major factor deteriorating free cash flow in the near term. In particular, investment asset valuation gains can distort net income, creating uncertainty regarding the actual cash recovery timing.
In the bullish scenario, high growth in the cloud segment (e.g., Alphabet's 82% growth) translates into actual cash inflows, whereas in the bearish scenario, excessive CAPEX burdens may limit stock price upside. Investors should monitor whether quarterly free cash flows turn positive and track return-on-investment metrics for AI investments.
AI가 생성한 분석으로 투자 자문이 아닙니다.
DYAX Investor Sentiment
Bullish (Long) 68% · Bearish (Short) 32%
358 participants
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