Amazon and Oracle Are Extremely Anxious About The Upcoming Fed Meeting

Amazon (AMZN) and Oracle (ORCL) face mounting financial pressure as massive capital expenditures for artificial intelligence infrastructure turn their cash flows negative ahead of a critical Federal Reserve meeting. With the Federal Funds upper bound at 3.75% and the 10-year Treasury yield sitting at 4.78%, elevated borrowing costs create significant headwinds for funding hyper-scale data center expansions. While Amazon's AWS revenue surged 37% to $42.23 billion with a backlog of $496 billion, its quarterly capital expenditure reached $54.2 billion, pushing trailing twelve-month free cash flow to negative $7.6 billion. In comparison, Oracle reported an unprecedented $638 billion backlog, but recorded negative $23.69 billion in free cash flow for FY2026, requiring an estimated $40 billion in debt and equity financing to support its $70 billion capital outlay. Market implications vary between the two tech giants. Amazon's highly diversified cash flows across retail, advertising, and subscription services offer a built-in shock absorber if interest rates remain elevated. Conversely, Oracle exhibits higher sensitivity to Fed policy, where a dovish pivot would ease funding burdens, but prolonged high rates risk shareholder dilution.