Amazon's $25 billion debt raise was a sale of eight bond tranches priced on July 7, 2026, with maturities from 2029 to 2066 and fixed coupons from 4.600% to 6.250% [1]. Orders reached about 2.5 times the amount offered, down from 3.2 times at Amazon's March deal, a sign that investors wanted more yield to fund the AI buildout even as Amazon (AMZN) raised its 2026 capital spending plan to about $220 billion [2][4].
Three months later, the numbers behind the deal are clearer. AWS growth has accelerated to 37%, Amazon's long-term debt has roughly doubled since the end of 2025, and free cash flow has turned negative on a trailing basis because of record spending on data centers [3].
What were the terms of Amazon's $25 billion bond sale?
According to the final prospectus supplement dated July 7, 2026, Amazon sold senior unsecured notes in eight parts, with delivery on or about July 9 [1]. Net proceeds were about $24.848 billion after underwriting discounts, for general corporate purposes that may include capital expenditures, debt repayment, acquisitions and share repurchases [1].
| Tranche | Amount | Coupon |
|---|---|---|
| Floating rate notes due 2029 | $750 million | Compounded SOFR plus 0.58% |
| Notes due 2029 | $3.50 billion | 4.600% |
| Notes due 2031 | $4.25 billion | 4.800% |
| Notes due 2033 | $3.00 billion | 5.100% |
| Notes due 2036 | $4.50 billion | 5.300% |
| Notes due 2046 | $2.75 billion | 6.000% |
| Notes due 2056 | $4.00 billion | 6.100% |
| Notes due 2066 | $2.25 billion | 6.250% |
The structure leaned long. About 36% of the principal, $9.0 billion, matures in 2046 or later, which matches the long useful life of data centers and power infrastructure [1]. Amazon did not stop there: on September 9, 2026 it priced a further £4.25 billion of sterling notes in four series due from 2029 to 2045, with coupons from 5.200% to 6.650% [5].
How strong was investor demand for Amazon's bonds?
Demand was solid but softer than earlier in the year. Fortune reported that the July deal drew orders of about 2.5 times the bonds offered, compared with 3.2 times for Amazon's March offering, and that Amazon paid about 18 to 21 basis points of extra yield on its longest bonds to attract buyers [2]. Bank of America analysts quoted in the same report said investors were pushing back on the heavy supply of hyperscaler debt [2].
Early reports differed on the final order ratio once banks trimmed the book, so the 2.5 times figure is the best available measure. Even so, the pricing shows that Amazon can still borrow for 40 years at a fixed 6.25%, a cost few companies can match.
What the deal means for other AI borrowers
- Higher new issue premiums. If even Amazon must add yield to clear a large deal, lower rated borrowers may face wider spreads.
- More supply ahead. The scale of 2026 AI capital plans means bond investors will keep seeing large offerings from the biggest technology companies.
- Balance sheet differences matter more. Companies with weaker cash flow than Amazon may find the market less willing to absorb their debt at similar terms.
Amazon capex in 2026: what the debt is funding
On July 30, 2026 Amazon reported that net purchases of property and equipment reached $53.1 billion in the second quarter, up 69% from $31.4 billion a year earlier, and $169.0 billion over the trailing twelve months, up 64%, mainly for artificial intelligence [3]. In the first quarter, capital spending was $43.2 billion [2]. On the earnings call, management raised its 2026 capital spending outlook to about $220 billion [4].
Operating cash flow is strong, at $161.4 billion over the trailing twelve months, up 33% [3]. But spending grew faster, and free cash flow was an outflow of $7.6 billion over the same period, compared with an inflow of $18.2 billion a year earlier [3]. That gap is the plain reason for the bond sales. Long-term debt rose to $128.9 billion at June 30, 2026 from $65.6 billion at December 31, 2025, while cash and equivalents fell to $78.2 billion from $86.8 billion [3].
Amazon AWS results in 2026: is the spending paying off?
The early return on that spending is visible in AWS. Segment sales rose 37% to $42.2 billion in the second quarter, the fastest growth in 18 quarters, and operating income rose to $16.6 billion from $10.2 billion, an operating margin of 39.4% [3].
| Metric | Q2 2025 | Q1 2026 | Q2 2026 |
|---|---|---|---|
| AWS net sales | $30.9 billion | $37.6 billion | $42.2 billion |
| AWS operating income | $10.2 billion | $14.2 billion | $16.6 billion |
| AWS operating margin | 33.0% | 37.8% | 39.4% |
| Amazon capital expenditures | $31.4 billion | $43.2 billion | $53.1 billion |
Sources: Amazon second quarter 2026 results [3] and Fortune for first quarter 2026 capex [2]. Margins are calculated from reported sales and operating income.
Management also said the AWS backlog reached about $496 billion [4]. Total company net sales rose 20% to $200.6 billion and operating income rose 43% to $27.5 billion [3]. Reported net income of $62.6 billion was inflated by $53.4 billion of pre-tax non-operating income, mainly from Amazon's investments in Anthropic, so operating income is the better measure of the core business [3].
The stock reaction reflects this. AMZN closed at $245.34 on July 10, little changed from $242.67 before the bond week, then jumped 15.3% on July 31 after the earnings release to $271.58 [6]. It closed at $249.67 on September 25, 2026, up 8.2% for the year but 12.1% below its August 3 high close of $284.02 [6]. Amazon's price history and filings can be followed on DataPorium's stock market pages.
Amazon's $25 billion debt raise shows that AI spending now exceeds even Amazon's large operating cash flow, but AWS growth of 37% suggests the investment is producing returns.
Frequently asked questions
How much debt did Amazon raise in July 2026?
Amazon sold $25 billion of senior unsecured notes in eight tranches on July 7, 2026, with net proceeds of about $24.848 billion. The notes mature between 2029 and 2066.
What interest rate is Amazon paying on its new bonds?
The fixed rate coupons range from 4.600% on notes due 2029 to 6.250% on notes due 2066. A $750 million floating rate tranche pays compounded SOFR plus 0.58%.
Why is Amazon borrowing money if it is so profitable?
Amazon's capital spending, now planned at about $220 billion for 2026, is running above its operating cash flow. Trailing twelve month free cash flow was an outflow of $7.6 billion as of June 30, 2026, so debt fills the gap.
How fast is AWS growing in 2026?
AWS sales rose 37% year over year to $42.2 billion in the second quarter of 2026, its fastest growth in 18 quarters. Operating income was $16.6 billion.
Sources & References
- [1] Amazon.com, Inc. prospectus supplement (Form 424B5) for $25 billion of notes, July 7, 2026
- [2] Fortune: Amazon's $25 billion surprise bond sale dangled extra yield to lure in buyers
- [3] Amazon.com Announces Second Quarter Results (July 30, 2026)
- [4] Yahoo Finance: Amazon.com Inc (AMZN) Q2 2026 earnings call highlights
- [5] Amazon.com, Inc. prospectus supplement (Form 424B5) for sterling notes, September 9, 2026
- [6] DataPorium Stock Market: Amazon (AMZN) price history
