Amazon zavírá své sanfranciské pracoviště AGI v rámci letošních propouštění, ale výzkum frontier modelů pokračuje. Novinka Nova Act zůstává dostupná na AWS.
by Todd Bishop on Jul 24, 2026 at 12:46 pmJuly 24, 2026 at 12:49 pm
GeekWire File Photo Amazon is closing its San Francisco AGI site as part of the layoffs it made this week in its artificial general intelligence organization, but said its frontier model research lab will continue.
A company spokesperson confirmed the news of the site closure, which was first reported by The Information. Amazon’s frontier model research work will carry on under Pieter Abbeel, a UC Berkeley professor who joined Amazon in 2024 when the company licensed the technology and hired the team from Covariant, the robotics startup he co-founded.
The AGI Lab was founded in December 2024 and initially built around several dozen employees Amazon brought in from the startup Adept, including its co-founder and CEO David Luan.
The team grew to about 80 people at its peak, according to The Information, but more than a dozen of the Adept hires have since left, Luan among them. Earlier this week, Amazon confirmed it was cutting an unspecified number of jobs across the broader AGI organization.
Impacted employees will have the chance to explore other roles at Amazon, the spokesperson said, and the company is supporting them through that process.
Nova Act, the browser-agent model and service that came out of the group, remains available on AWS and in use by customers. More broadly, AWS has continued to build out its agentic AI lineup, including Bedrock AgentCore and applications like Kiro, Quick, Continuum and Transform.
The moves come as Amazon invests heavily in helping customers deploy AI, including a $1 billion AWS effort to embed engineers with businesses building AI agents. The initiative reflects an expanded industry focus toward putting agents and models to better use for customers.
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Moody’s varuje, že bezprecedentní výdaje na AI zhoršují úvěrovou kvalitu Amazonu, Meta, Alphabetu a dalších hyperscalerů. Kapitálové výdaje mají v roce 2026 dosáhnout 785 miliard USD a v příštím roce zhruba 1 bilionu USD.
The race to build artificial intelligence infrastructure at a trillion-dollar annual clip is eroding the free cash flow and increasing balance-sheet risk at so-called hyperscalers, warned Moody's Ratings.
In a research note released this week, Moody's said that the spending surge is forcing even the world's most cash-rich corporations like Alphabet and Microsoft to lean heavily on debt, stock sales and off-balance-sheet moves to fund their AI ambitions.
"Previously, these companies relied on asset-light structures centered on software, intellectual property, and scalable cloud services that required modest capital investment," Moody's said in the Wednesday note. "The transition from asset-light to asset-heavy models requires unprecedented levels of investment and capital raising."
The moves "threaten credit quality" for the six companies tracked by Moody's, which include Microsoft, Amazon, Alphabet, Meta, Oracle and CoreWeave, according to the report.
The ratings firm projects that capital expenditures — or capex, which are investment for physical assets like data centers — will hit $785 billion in 2026 before reaching about $1 trillion next year.
The shift breaks a decades-long Silicon Valley formula that created the world's most valuable companies. Software costs little to replicate, yielding fat profit margins and fortress balance sheets. Generative AI, by contrast, demands a vast physical footprint: warehouses crammed with expensive and energy-hungry servers and chips.
To finance the expansion, tech giants are increasingly turning to Wall Street, resulting in booming profits for the financial industry.
Direct debt across the six hyperscalers has reached approximately $460 billion, according to Moody's. Tech companies are also tapping public markets for cash, including Google-parent Alphabet, which last month announced an $85 billion equity sale.
Leasing data centersThe ratings firm noted that because AI hardware and infrastructure require massive upfront investment while revenue materializes over a longer time horizon, free cash flow across the sector is coming under pressure.
To keep direct debt off their balance sheets, hyperscalers are leaning on off-balance-sheet financing, mostly through long-term data center leases, the report explained.
Moody's said that lease commitments across the group have ballooned to $1.2 trillion. More than $820 billion of that total is from leases that haven't started yet, meaning the data centers are still being built.
While these obligations don't show up as traditional debt, Moody's says it considers them as debt-equivalent liabilities that will bind companies to significant rent payments down the line.
Despite the warning, Moody's noted that Microsoft, Alphabet, Amazon and Meta retain among the strongest corporate balance sheets in the world, making it unlikely that their investment grade ratings are under imminent threat.
The immediate pressure is concentrated on lower-rated entities like Oracle and specialized AI cloud provider CoreWeave. Oracle carries a rating of Baa2 with a negative outlook, placing it just two notches above junk status.
Meanwhile, CoreWeave operates within the high-yield market with a Ba3 rating, relying on complex private debt structures to finance its GPU hardware fleets.
Circular ecosystem Moody's also pointed to structural circularity within the AI boom. Some of the multibillion-dollar backlogs reported by hyperscalers stem from strategic deals with pre-IPO artificial intelligence labs including OpenAI and Anthropic, Moody's noted.
The firms have invested billions into AI labs that, in turn, spend heavily on cloud computing from those same companies, creating what Moody's described as a circular AI ecosystem.
The overlapping relationships heighten risks because many of the industry's biggest companies are increasingly dependent on the same AI customers and the same assumptions about future demand, Moody's said.
Even so, the tech giants have significant strengths that help offset those risks.
Demand for AI computing remains robust, cloud businesses continue to grow and hyperscalers have signed hundreds of billions of dollars in long-term customer contracts that should provide predictable revenue. Those deals support the industry's largely-strong credit profiles, even amid the spending boom.
Still, investors should recognize that the tech industry's financial profile is undergoing a structural change unlike anything seen in the cloud era, according to Moody's.
"Investors will increasingly focus on these companies' ability to realize an adequate return on investment," the ratings firm said.
Amazon má 143 miliard USD v penězích a peněžních ekvivalentech a 364 miliard USD v dlouhodobých cloudových smlouvách, což podle článku tlumí obavy z vyšších kapitálových výdajů. Investice do infrastruktury sice krátkodobě tlačí na volný peněžní tok, ale mají přinést velmi ziskové výnosy do konce roku 2028.
SummaryWhile critics panic over increasing CapEx, Amazon’s $143 billion cash reserves generate enough in quarterly interest income to fund debt obligations.Amazon has $364 billion, and counting, in legally binding, long-term cloud contracts that ensure data center compute capacity is accounted for before construction completes.Though infrastructure investments have temporarily reduced short-term free cash flow, these assets are projected to deliver highly profitable returns by the end of 2028 and for many years to follow.Editor's note: Seeking Alpha is proud to welcome MarginMinded as a new contributing analyst. You can become one too! Share your best investment idea by submitting your article for review to our editors. Get published, earn money, and unlock exclusive SA Premium access.
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Analyst’s Disclosure: I/we have a beneficial long position in the shares of AMZN either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.
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Amazon bude od třetích stran vyžadovat označování obrázků a videí s „osobami vytvořenými pomocí AI“ v reakci na nový zákon v New Yorku. Na svém webu také přidá indikátor u položek, kde se takový obsah objeví.
Amazon is requiring that third-party sellers label any product images or videos that contain "AI-generated people" after New York recently passed a law mandating greater transparency around "synthetic performers" in ads.
The company informed sellers Wednesday of the policy change, according to a copy of the announcement viewed by CNBC. The policy directs sellers to tag images and any "A+ content," which refers to videos or other graphics on listing pages, with specific metadata keywords before they're uploaded.
"Recent legislation requires disclosure when images or videos in advertisements contain photorealistic AI-generated people," Amazon wrote in the announcement.
The New York law, which took effect last month, requires companies to disclose if "synthetic performers" are used in place of human actors in advertising. The legislation applies to "digitally-created media that appear as a real person." Governor Kathy Hochul described it as a "first-in-the-nation" law.
"Without notice that the content the public is viewing is not real, AI-generated synthetic performers and manipulated media can undermine one's ability to accurately distill fact from fiction," Hochul's office said in a release.
Amazon clarified in its announcement that the requirement doesn't apply to content featuring TV, video game and movie characters, or content that includes real people, even if they've been altered using AI.
The company said it will "add an indicator" to listings on its website, informing consumers that images or other content feature AI-generated people, "where applicable." It's unclear what criteria Amazon will apply when deciding when to display the label to shoppers.
Amazon didn't immediately provide a comment.
Amazon has embraced AI internally and it's increasingly infusing the technology across its portfolio. The company has optimized listing titles and details so they're more likely to be spotted by AI systems, invested in a recently rebranded assistant called Alexa for Shopping, and launched a feature that injects AI-generated products into its search bar in real time based on user queries.
More Amazon third-party sellers are using AI to generate text, images and other content for their listings, partly by using the company's tools.
Outside sellers are the engine behind Amazon's core retail business, accounting for more than 60% of goods sold on its marketplace.
There is no federal law requiring companies to disclose when advertising content has been created using AI.
States have taken steps to require greater transparency around AI content. Earlier this year, California began requiring large AI providers to embed watermarks in AI-generated images, video or other content.
Meta, TikTok, Pinterest and Google's YouTube have added AI-generated content labels to videos and images uploaded to their platforms. TikTok and Meta have recently been criticized for not adequately labeling ads that feature AI-generated influencers hawking dubious products, in some cases without a brand's knowledge.
TikTok has said it's taken steps to ban accounts that make misleading health claims, and Meta said it labels AI videos
Alphabet zvýšil výhled kapitálových výdajů na 195 až 205 miliard USD, protože poptávka po kapacitě převyšuje nabídku. Akcie společnosti následující den klesly o 6 %.
Big tech companies and spending on artificial intelligence and its infrastructure have been one of the biggest stories in the stock market this year, ever since Amazon (AMZN -4.53%), Alphabet (GOOG -6.68%) (GOOGL -6.80%), Microsoft, and Meta Platforms disclosed plans to spend $700 billion on capital expenditures this year.
Of that, Amazon was the biggest spender at $200 billion, with Alphabet close behind at $185 billion. But in the company’s second-quarter earnings call with analysts, Alphabet executives announced plans to join Amazon in the $200 billion club, spending its capex primarily on servers, connectivity, storage, and memory for data centers.
Alphabet stock fell 6% the next day. Will Amazon also raise its capex spending when it reports earnings on July 30? And just as importantly, will Amazon stock face the same fate as Alphabet?
Image source: Amazon.
Why is Alphabet raising capex?Alphabet, the parent company of Google, spent $44.9 billion on capex in the second quarter, with 60% of that on servers and 40% on data centers and networking equipment. It had previously projected full-year capex to be in a range of $180 billion to $190 billion; it now anticipates spending between $195 billion and $205 billion.
“We're still in a supply constraint environment. I think we've said this now for multiple quarters in a row, we are seeing very strong demand, both from external cloud customers as well as across the business. Our goal is to invest as long as we see an attractive return on that investment,” CFO Anat Ashkenazi said.
In short, Alphabet says that demand is outpacing computing capacity, even though Alphabet is accelerating its spending.
Overall earnings for Alphabet were exceptionally strong, with revenue of $119.79 billion, up 24% from a year ago. Google Cloud revenues were $24.76 billion, up 82% from a year ago.
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How likely is it for Amazon to also raise capex?I believe it’s very likely. First, consider that Amazon is a much larger cloud provider than Alphabet. Amazon Web Services has the greatest global share of the cloud computing market at 28%, followed by Microsoft at 21% and Google Cloud at 14%.
Second, Amazon has been very public and bullish about its capex. In a letter to shareholders in April, CEO Andy Jassy posted a lengthy statement on Amazon’s website justifying the company’s planned spending and saying it would be a “meaningful leader” in AI.
We’re not investing approximately $200 billion in capex in 2026 on a hunch. The recent OpenAI commitment (over $100 billion) is an example of this, but there are several other customer agreements completed (and unannounced), or deep in process. Of the AWS capex we expect to spend in 2026, much of which will be monetized in 2027-2028, we already have customer commitments for a substantial portion of it. And third, there are indications that major hyperscalers are accelerating their AI spending. BNP Paribas analyst Stefan Slowinski recently predicted in an investor report that Microsoft, the No. 2 cloud computing company by market share, would spend a whopping $262 billion on capex in its 2027 fiscal year. (Microsoft reports its fiscal fourth quarter and full year 2026 earnings on July 29, but the company had previously disclosed $104.3 billion in capex spending through its first three quarters.)
What to expect from Amazon’s earningsFirst, I would be shocked if Amazon did not increase its projected capex, but I also expect the market to react poorly because of it. Investors are very focused on the pressure big tech’s capex spending is putting on free cash flow, and I understand why there are concerns that Alphabet, Amazon, and the rest won’t be able to realize a profit from all this spending.
But as Jassy points out, Amazon isn’t spending blindly. As long as Amazon’s spending and planned investment are backed by customer commitments and the demand for more computing power exists, then Amazon looks to be a long-term winner. Any dip in the stock following earnings could be an appealing opportunity to acquire more shares.
Amazon přidává cloudové hraní Luna přímo do aplikace Prime Video prostřednictvím nové záložky Games, aby zvýšil povědomí mezi předplatiteli Prime. V USA a Británii mohou uživatelé s Prime a Fire TV spustit Luna bez příplatku.
by Thomas Wilde on Jul 23, 2026 at 8:46 amJuly 23, 2026 at 8:46 am
Amazon will begin to fold its Luna cloud platform directly into the Prime Video app via the new Games tab, in an effort to get word about Luna to Prime members. (Amazon Luna promotional image) Amazon announced today that it has updated some versions of its Prime Video app to include direct access to its cloud-based Luna gaming platform.
The business goal is to solve Luna’s awareness problem and bring new users to the platform. Many Prime members don’t know the gaming service is included with their membership.
Consumers in the US and UK who have both a Prime subscription and a Fire TV can now launch Luna directly from the Prime Video app, where it can be found in its own dedicated tab in the UI. Prime subscribers who launch Luna in the app will get direct access to a library of both casual and mainstream “AAA” video games for no additional cost and without having to exit the app.
“Effectively, we relaunched last October, taking a bunch of the value of Luna that had been behind a paywall… We pushed it into the Prime membership, as a way of providing great value and trying to grow our business,” Jeff Gattis, GM of gaming at Amazon, told GeekWire.
Players on Luna can stream an assortment of games to their TV or browser via Amazon’s cloud servers, using a smartphone as a controller if they don’t have a compatible gamepad. Luna’s current library ranges from established mainstream hits like Indiana Jones and the Great Circle, Dispatch, and Fallout 4 to an assortment of casual-friendly exclusive titles like Amazon’s own Courtroom Chaos.
(Amazon Luna press image) Since that relaunch, Gattis said, the company has “basically 5x’d” its player base.
“The question for us is, how do you build upon that?” he said. “How do we let 200 million-plus Prime members worldwide know that they have this great benefit where you can play $70 games inside your Prime membership at no additional cost? One of our biggest challenges today remains that people don’t know the [Luna] benefit exists.”
While Luna was previously available to Prime subscribers via web browser and a couple of other types of smart TVs, it was a standalone service that required users to seek it out on its own. By shifting it into its own tab on the Prime Video app, Amazon’s hope is to drive up awareness that, well, Luna is there at all.
“It’ll start on Fire TV, but obviously our end state is to roll out to more countries and more devices, both first-party and third-party,” Gattis said. “Eventually we’ll be everywhere that Prime Video is.”
Dispatch, a viral indie hit from 2025 about office romance at a superhero agency, has been a big hit on Amazon Luna. (AdHoc Studio image) The integration of Luna with Prime could also potentially bring back the largely-abandoned practice of video game movie tie-ins. Fans of this summer’s Masters of the Universe reboot can watch the film on Prime Video, then switch to Luna to play Masters of the Universe: Legends Unite, a strategic deckbuilding game that’s currently exclusive to Luna. This kind of transmedia synergy used to be a part of every big summer action movie, but it’s largely fallen by the wayside since the 2010s.
Luna originally debuted in 2020 as a subscription-based cloud service. Subscribers could pay a monthly fee for access to over 100 video games, which they could play through their browser by streaming them from Amazon’s servers.
Back then, Luna was Amazon’s entry into what was shaping up to be a publisher-driven “battle for the cloud,” with companies like Google and Nvidia all launching their own game streaming services. Over time, however, the cloud’s impact on gaming hasn’t matched its early hype.
More recently, the component crunch has driven up the price of consoles and graphics cards, and that plays into Amazon’s bet on Luna.
Gattis said the cloud has been “technology ahead of its time,” in part because the industry aimed it at the wrong people, pitching it as a direct replacement for consoles and gaming PCs.
“That’s a heavy lift to ask somebody like myself,” he said. “I’ve invested both emotionally and financially in my Series X console and my 5090 graphics card. I’m happy.”
Amazon is catering to everyone else: players unlikely to buy a gaming PC or a current-generation console, let alone the next generation of gaming hardware at even higher prices. For the first time, Gattis said, there are “a lot more people who are going to think about the cloud as a viable alternative to $1,500 hardware.”
Amazon klesl o 4 % poté, co trh znervóznily obavy kolem výdajů na AI a vyšetřování Senátu kvůli vlivu Číny na marketplace. Investoři vyhlížejí výsledky příští týden.
Amazon (NASDAQ:AMZN | AMZN Price Prediction) stock is down 4% to $234.81 Thursday afternoon, cutting through what had been a relatively steady July trading range for the e-commerce and cloud giant. The move lands inside a broader tech pullback, with the NASDAQ 100 down nearly 2% on the day. Amazon shares now sit well below their 50-day moving average of $251.16.
The drop comes a week ahead of the company’s Q2 2026 earnings release on July 30, sharpening focus on AI infrastructure spending, AWS growth, and any hint of regulatory drag. Today’s slide reflects a confluence of catalysts.
AI Capex Jitters and a Senate Overhang The dominant driver is a sector-wide rotation out of mega-cap AI names after Alphabet‘s (NASDAQ:GOOGL) capex guidance hike this week. Alphabet stock is down 6%, and Meta Platforms (NASDAQ:META) shares are down 4%, as investors question whether AI returns will outpace ballooning infrastructure costs.
Layered on top are two Amazon-specific overhangs. Per a Bloomberg report roughly 17 hours old, the U.S. Senate Small Business Committee is investigating allegations Amazon allowed Chinese influence on its online marketplace. Republican committee staff said they found “compelling evidence” of Amazon “negligence related to Chinese influence,” though the cited committee email “didn’t cite any specific evidence.”
The probe stems from an earlier Bloomberg story about an alleged bribery market involving Amazon employees in China selling favors to merchants. Amazon declined to comment, and these remain allegations under investigation, not established facts. Separately, CNBC reported layoffs in Amazon’s artificial general intelligence (AGI) unit, framed by the company as a strategic realignment toward higher-impact projects.
Peers and Valuation Context The e-commerce peer group is trading softer but not dramatically so. eBay (NASDAQ:EBAY) stock is down 3%, and Etsy shares are down 2%, suggesting today’s Amazon move is more tech-and-regulatory driven than a broad consumer discretionary problem.
The valuation picture keeps Amazon roughly in line with its e-commerce peers. Amazon stock trades at a trailing-twelve-month P/E ratio of 28x, sitting between eBay stock at 25x and Etsy stock at 30x. For diversified exposure to Amazon, some traders use the State Street Consumer Discretionary Select Sector SPDR Fund (NYSE ARCA:XLY), though the fund is top-heavy. Amazon and Tesla (NASDAQ:TSLA) sit as outsized weights, so the ETF doesn’t provide extremely broad diversification.
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Bull Case Still Intact Into Earnings Despite the pullback, Wall Street remains constructive on Amazon stock into next Thursday’s earnings release. Bank of America reiterated a Buy rating on AMZN stock with a $310 price target, citing AI-driven AWS acceleration and expected Q2 revenue of $198.8 billion. The consensus analyst target sits near $313, with a Moderate Buy rating overall.
Amazon’s Q1 2026 setup supports that view. AWS grew 28% to $37.6 billion, the fastest pace in 15 quarters, and advertising crossed $70 billion in trailing revenue. Prediction markets currently price a 95% probability Amazon beats Q2 estimates.
Still, the bearish overlay shouldn’t be overlooked. Amazon’s Q1 2026 capital expenditures hit $44.2 billion, and the company’s TTM free cash flow fell to $1.2 billion, a reminder of how much cash the AI buildout is consuming. Regulatory noise from the Senate probe adds another wild card.
What to Watch Investors can watch for whether Amazon stock holds the 200-day moving average of $234.35 into the close, and whether AWS growth, operating income guidance, and any capex commentary on the July 30 call reset the narrative. Maintaining modest position sizing into the earnings release may be the reasonable path here, given the regulatory tail risk sitting alongside a fundamentally strong quarter.
The key tension is straightforward: a strong fundamental setup (accelerating AWS, expanding advertising, and a Q1 beat) is running headlong into an AI-capex debate that just claimed Alphabet and Meta Platforms as collateral damage. Whether Amazon’s Q2 print reframes the spending narrative or reinforces it will likely dictate direction into August.
The takeaway for investors: today’s AMZN stock pullback looks more like sentiment and headline risk than a fundamental break. Traders comfortable with volatility may find the setup attractive, while longer-term holders should focus on AWS growth, operating margin trajectory, and management’s tone on the roughly $200 billion 2026 capex plan when Amazon reports next week.
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Amazon.com stock is trending lower. What’s pulling AMZN shares down? Earnings Preview & HistoryAmazon is scheduled to report second-quarter earnings on July 30. Analysts estimate EPS of $1.82 along with revenue of $196.02 billion. For the prior quarter, Amazon reported EPS of $2.78, beating the consensus estimate of $1.64. The company also posted revenue of $181.52 billion, exceeding the consensus estimate of $177.29 billion.
Over the last four quarters, Amazon has averaged an EPS surprise of 0.30% and a revenue surprise of 0.02%.
What To WatchInvestors will be watching AWS revenue growth and operating margin closely, since that’s the clearest signal of whether enterprise AI demand is actually boosting cloud profitability rather than just driving up capex and depreciation. Advertising revenue growth is another key figure to track, as it can help offset retail margin pressure and keep overall operating income moving in the right direction.
In North America and International retail, the focus shifts to operating income and fulfillment cost trends — if shipping and logistics costs start climbing again, they could quickly eat into any gains from stronger sales.
Analyst Consensus & Recent Actions The stock carries a Buy rating with an average price forecast of $320.10. Recent analyst moves include:
Wells Fargo: Overweight (Raises Target to $322.00) (July 21) Keybanc: Overweight (Raises Target to $335.00) (July 16) Wedbush: Outperform (Target $293.00) (July 16) A Tug-of-War Above the 200-Day AverageFrom a trend perspective, Amazon is in a "tug-of-war" zone: it’s trading 2.1% below the 20-day SMA ($243.61) and 4.8% below the 50-day SMA ($250.60), but it’s still 1.7% above the 200-day SMA ($234.46). That mix often reads as a pullback inside a longer uptrend, with the 200-day acting as the line bulls want to defend.
Momentum is also fairly balanced, with RSI at 47.59 (neutral), suggesting the stock isn’t stretched enough to force either capitulation selling or a snapback rally on momentum alone. In practice, that puts more weight on nearby levels and moving averages—especially whether price can reclaim the 20-day/50-day area on rebounds.
The moving-average structure is mixed: the 20-day SMA is below the 50-day SMA (a bearish near-term crossover), while the 50-day SMA remains above the 200-day SMA after the golden cross in May. Traders will often treat that as "long-term trend intact, short-term trend under pressure," which fits with the recent swing high in May followed by a swing low in June.
Key levels are fairly clean here, with overhead supply near the mid-$240s to around $250 and a more meaningful downside reference well below current price. A break and hold back above the 50-day area would improve the near-term picture, while losing the 200-day would raise the odds that the pullback is turning into something deeper.
Key Resistance: $249.50 — lines up closely with the 50-day SMA area ($250.60), a common spot where rebounds can stall Key Support: $225.00 — a nearby downside level traders may watch as a prior demand zone if the pullback accelerates Benzinga Edge RankingsBelow is the Benzinga Edge scorecard for Amazon, highlighting its strengths and weaknesses compared to the broader market:
The Verdict: Amazon’s Benzinga Edge signal reveals a growth-heavy profile with only moderate momentum, which fits a stock that can trend long-term but still chop around key moving averages in the short run. For traders, that often means waiting for either a reclaim of the $249.50 area or a cleaner dip toward support before pressing directional bets.
Amazon Shares Edge LowerAMZN Price Action: At the time of publication, Amazon shares are trading 3.11% lower at $237.24, according to data from Benzinga Pro.
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This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
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Jeff Bezos tlačí na redesign Prime Video, aby AI stála v centru služby. Projekt Lighthouse má zlepšit doporučování i hlasové ovládání pro více než 200 milionů uživatelů.
SummaryCompaniesPrime Video to receive an AI-driven redesignJeff Bezos is overseeing Prime Video projectAmazon aims to improve its battered reputation in AISAN FRANCISCO, July 23 (Reuters) - Jeff Bezos has identified a new, high-profile platform to help showcase the hundreds of billions of dollars Amazon (AMZN.O), opens new tab has bet on artificial intelligence: Prime Video.
The Amazon founder and executive chairman pushed Prime Video head Mike Hopkins to overhaul the streaming service so that AI is front and center, according to four people with direct knowledge of the matter.
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The resulting project, known internally as Lighthouse, would shine a light on Amazon’s AI capabilities for the more than 200 million consumers who use Prime Video.
Lighthouse is viewed as one critical piece in Amazon’s companywide efforts to elevate the company’s stature in artificial intelligence, as competitors like OpenAI and Anthropic speed ahead, the people said. Other AI initiatives, such as the multiyear overhaul of its Alexa voice assistant to provide more conversational responses, have had mixed results and the unit is still losing money, people familiar with the matter have previously told Reuters.
Amazon declined to comment.
CONTENTIOUS MEETING SPARKED OVERHAULThe Prime Video initiative grew out of an internal presentation the streaming service’s executives made to Bezos last autumn that turned contentious, according to these people.
Bezos was displeased that Hopkins' plans to update Prime Video failed to sufficiently highlight the service’s capabilities in AI and personalization, according to the people. Bezos' response prompted the Prime Video executives to scrap their previous plans and embark on Lighthouse.
The company has committed some $200 billion to capital expenditures this year, related primarily to developing AI, and invested an initial $23 billion in ChatGPT-maker OpenAI and Anthropic combined, with the potential for upwards of another $40 billion.
Lighthouse entails a broad swath of new features that use AI to improve film and TV recommendations, in part by learning consumers' preferences, and responding to spoken requests, according to one person with knowledge of the project who spoke on condition of anonymity. Prime Video is working on redesigning the main home page as part of the project, the other people said.
The final redesign has not yet been settled, but one option Prime Video executives discussed includes AI-driven tiles, with pre-populated viewing suggestions like “action movies from the 1980s” or “Christmas rom-coms,” three of the people said. Another source said a current version does not include text-heavy tiles.
The traditional search function would remain, as well as space at the top of the screen for video highlights promoting new releases or sporting events, such as “Thursday Night Football,” the weekly National Football League game that is exclusive to Amazon.
Amazon is already testing versions of the redesign with a few users, said one of the people. Prime Video's plans, the people said, could change due to feedback from early testers, or financial or other concerns.
Prime Video, like other streaming services, relies on paid placement by studios, as well as software algorithms, to dictate where content is displayed on the home screen, said Michael Goodman, director of entertainment research for Parks Associates. Any change to that, including through greater personalization, could upend that system, he said.
“The real estate on the home screen is very valuable to studios, so it would be a big change to take away any of that coveted space,” said Goodman.
FOUNDER'S PERSONAL INVOLVEMENTBezos has been personally involved in the Prime Video overhaul, the people said, including receiving occasional updates, underscoring the stakes for a company battling a reputation for subpar AI foundation models. Improved personalization can lead to more hours spent on the service.
His involvement with the Prime Video project is unusual as he has taken a step back from most day-to-day operations at Amazon since relinquishing the CEO title in 2021. He also owns the Washington Post and is the founder of spaceflight firm Blue Origin and AI startup Prometheus, reportedly valued at around $41 billion. He has focused more of his attention on those projects.
Prime Video is one of Amazon's best-known brands and is available to consumers in a number of markets where Amazon has limited or no e-commerce presence. Beyond no-cost shipping, Prime Video is the Prime subscription's most-used offering.
As part of the Lighthouse project, Amazon has also discussed integrating the Alexa voice assistant into Prime Video’s search function, the people said. Amazon in early 2025 released an overhauled generative AI version of Alexa, and integrated it into its main shopping site in May 2026.
Kam Keshmiri, global head of the Prime Video design, was also at the meeting with Bezos and is now leading the Lighthouse redesign, the people said.
PRIME VIDEO'S MARKET POSITIONIn the U.S., Prime Video is the fourth most-watched streaming service, but it is prized by Bezos, who frequents high-profile Hollywood events and owns a $165 million home in Beverly Hills.
Amazon became the first streaming service to win an Academy Award in a major category. The company deepened its commitment to entertainment in 2022 when it paid $8.5 billion to buy MGM, giving it access to many well-known entertainment franchises, including James Bond.
Prime Video’s 4.2% share of television viewing in the U.S. trails YouTube with 13.4%, Netflix (NFLX.O), opens new tab at 7.8% and Walt Disney's (DIS.N), opens new tab Disney+ at 5%, according to April data from Nielsen. Still, many Prime Video members spend hours a week consuming content on the platform, and the company wants to further hone its personalization capabilities through AI.
The service released a significant redesign in July 2024, aimed at making it easier for users to distinguish between what content is free and what costs extra, such as subscriptions to Paramount+ and TV shows and movies that require a rental fee.
Amazon wants Prime Video to be users’ central hub for paid subscriptions.
Reporting by Greg Bensinger in San Francisco and Dawn Chmielewski in Los Angeles; Editing by Edmund Lee and Matthew Lewis
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Greg Bensinger joined Reuters as a technology correspondent in 2022 focusing on the world's largest technology companies. He was previously a member of The New York Times editorial board and a technology beat reporter for The Washington Post and The Wall Street Journal. He also worked for Bloomberg News writing about the auto and telecommunications industries. He studied English literature at The University of Virginia and graduate journalism at Columbia University. Greg lives in San Francisco with his wife and two children.
Počet zaměstnanců Amazonu pobírajících potravinovou a zdravotní pomoc se od roku 2020 téměř ztrojnásobil. Firma zároveň plánuje v roce 2026 investovat do AI infrastruktury 200 miliard USD.
A new Government Accountability Office report commissioned by Sen. Bernie Sanders finds the number of Amazon (NASDAQ:AMZN | AMZN Price Prediction) workers relying on federal food and health assistance has nearly tripled since 2020, even as the company disclosed plans to spend $200 billion on artificial intelligence infrastructure in 2026.
The GAO reviewed enrollment data from 11 states representing roughly one-fifth of the U.S. population, covering February 2020 through September 2025. In those states, 12,346 Amazon workers were enrolled in the Supplemental Nutrition Assistance Program and 11,338 in Medicaid, figures the report says are nearly triple the counts in the prior GAO study.
Amazon ranked second among traditional employers of public-assistance recipients in the sample, behind Walmart, which had 16,055 workers on Medicaid, a 55% increase from the earlier report, and 15,515 on SNAP. Gig platforms including Uber, Lyft, DoorDash, Grubhub and Instacart collectively surpassed Walmart to become the single largest category of SNAP recipients, a reflection of how contract labor has reshaped the low-wage workforce.
A National Picture Nationally, the GAO estimates 13.8 million working Americans are on Medicaid, up from 12 million in 2020, and 10.6 million on SNAP, up from 9 million. Wage data helps explain the persistence. The Bureau of Labor Statistics reports average hourly earnings for the total private sector reached $37.64 in June 2026, but real average hourly earnings have barely moved, sitting at $11.32 in June 2026 compared with $11.18 in June 2024. The BEA’s latest quarterly figures show transfer receipts have grown to $5,099.7 billion in the first quarter of 2026, with Medicaid outlays climbing to $1,060.2 billion.
The Corporate Side of the Ledger Over roughly the same window covered by the GAO study, Amazon’s annual profit grew from $11.59 billion to $77.67 billion. Revenue reached $716.92 billion in fiscal 2025, with operating income of $79.98 billion.
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On the Q4 2025 earnings call on Feb. 5, 2026, CEO Andy Jassy told investors the company would spend about $200 billion in capital expenditures in 2026, a roughly 60% increase from about $125 billion in 2025, saying the outlays are “predominantly in AWS” to meet AI compute demand. Jassy characterized the spend as demand-driven: “We are monetizing capacity as fast as we can install it.”
The most recent quarter offers evidence the AI bet is landing. AWS generated $37.59 billion in revenue in Q1 2026, up 28% year over year, the segment’s fastest growth in 15 quarters. Capital expenditures in that single quarter hit $44.2 billion, and free cash flow fell sharply as the buildout accelerated. Prediction market participants on Polymarket assign a 0.89 probability that Amazon’s 2026 capex will exceed $200 billion.
What to Watch The two datasets cover overlapping but nonidentical fiscal years, which limits any causal reading between the AI outlays and the growth in workers on public assistance. The GAO report establishes that the workforce dependency trend accelerated during years when Amazon’s earnings, and its capital ambitions, were expanding at their fastest pace in company history. The next signal comes on July 30, 2026, when Amazon reports Q2 results and updates its capex guidance for the balance of the year.
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Amazon přepracoval Alexa+, aby méně spoléhala na modely Anthropic a více na vlastní AI, s cílem výrazně snížit náklady na provoz. Interní odhady počítaly s cloudovými náklady AWS kolem 1,7 miliardy USD v roce 2026.
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An Alexa+ signage during an unveiling event in New York, US, on Wednesday, Feb. 26, 2025. Bloomberg/Getty Images Amazon has redesigned Alexa to rely less on Anthropic models, part of a sweeping effort to lower the cost of running its AI-powered voice assistant, according to internal documents reviewed by Business Insider.
The documents, which span late last year through early this year, show Amazon pursuing a series of changes in how Alexa generates answers by routing more requests to its in-house AI models, avoiding unnecessary calls to Anthropic's Claude models, and squeezing more work from each GPU.
Together, the initiatives were expected to more than quadruple the number of customer transactions each unit of computing capacity could support.
The effort offers a glimpse into AI's next battleground.
As frontier models become more capable, competition is shifting from building smarter AI to making them cheaper to run. Google has promoted lower-cost AI through Gemini Flash, while companies including OpenAI and Cursor have introduced techniques that automatically send simpler requests to lower-cost models.
Amazon's financial projections underscore why the company has devoted so much effort to this challenge.
Internal forecasts from early this year showed AWS cloud costs for the upgraded, AI-powered Alexa+ were on pace to reach roughly $1.7 billion in 2026, nearly triple the previous year.
Alexa+ was also projected to run about 60% above Amazon's target for AWS cloud cost per monthly active user. Even after identifying roughly $450 million in potential savings, internal reviews concluded the business would not hit its financial targets. Amazon declined to comment.
A costly new AlexaUnlike earlier versions of Alexa, Alexa+ generates many responses with large language models running on GPU-intensive cloud services. That turned relatively inexpensive voice requests into AI workloads that cost far more to serve.
Those costs became more important as Amazon worked through a difficult launch. Business Insider previously reported that the company delayed Alexa+ multiple times as engineers grappled with AI hallucinations and questions about whether the service was ready for customers. Alexa+ expanded its availability in the US earlier this year.
Scaling the service only increased the financial pressure, a sign of how different generative AI is from more traditional software services.
As Alexa+ rolled out to more users, Amazon projected sharply higher AWS cloud spending as demand for AI computing capacity grew.
The company even weighed delaying some of its most expensive AI initiatives. Business Insider previously reported that Project Moonraker, Amazon's effort to give Alexa more advanced AI agent capabilities, was expected to become the service's largest AI expense this year, and the company considered delaying parts of the project as it searched for savings.
Reducing unnecessary calls to Claude
Amazon CEO Andy Jassy Andrej Sokolow/picture alliance via Getty Images One of Amazon's priorities was narrowing where Anthropic's Claude models would be used inside Alexa+.
Internal roadmaps called for moving specialized Alexa "Experts" from Claude Sonnet to Amazon's own AI models while reducing other use of Claude across the digital-assistant service.
Amazon also sought to avoid inference whenever possible. Inference is how AI models are run, and one way to limit the cost of this is to use caching, which stores answers to common requests so the AI doesn't have to do the same work again.
One Amazon roadmap called for Alexa+ to stop calling Claude models when suitable answers were already available in cache, and expand "deterministic" handling, which enables Alexa to answer more predictable requests without tapping a large language model.
The strategy is notable given Amazon's deep ties to Anthropic. Amazon has invested billions in the AI startup, partners closely with it, and stands to reap a significant windfall from Anthropic's IPO, if that goes ahead.
Yet the official internal documents reviewed by Business Insider show Amazon has been looking for ways to reduce how often Alexa relies on Anthropic's models.
Amazon's approach mirrors a growing trend across the AI industry. Investment firm William Blair wrote in a recent report that software companies are starting to reserve frontier models for difficult, high-stakes reasoning while routing less complex requests to cheaper models. That lowers inference costs without changing the customer experience.
"Multi-model routing is becoming standard architecture in software," analysts at William Blair wrote in the report.
Delivering more with fewer GPUsReducing model costs was only one part of the strategy. Amazon also focused on increasing how much work each GPU could perform.
Rather than simply adding more Nvidia GPUs, Amazon wanted to process more customer requests from the same computing gear. One roadmap projected software upgrades would increase available computing capacity by roughly 50% while cutting response times by about 40%. Internal planning dashboards tracked projected customer growth, GPU utilization, available capacity and inference efficiency as Amazon prepared to scale Alexa+.
Amazon's cost-saving efforts extended beyond software. Planning documents show the company evaluating both Nvidia GPUs and its own Trainium chips to further lower the cost of running Alexa+.
More broadly, the documents show Amazon treating frontier AI models and GPU capacity as expensive resources to be deployed selectively rather than by default.
That philosophy echoes a point CEO Andy Jassy has made publicly. In his shareholder letter last year, Jassy argued there's an "urgency" to make AI inference dramatically less expensive.
"Reducing the cost per unit in AI will unleash AI being used as expansively as customers desire, and also lead to more overall AI spending," Jassy wrote.
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Eugene is Business Insider’s Chief Tech Correspondent, where he leads coverage of Amazon. His reporting spans the company’s retail operations, AWS, Alexa, and its secretive internal work culture.Previously, he worked at CNBC, Fortune Magazine Korea, and Japan's Yomiuri Shimbun. He holds degrees from NYU and Columbia University’s Graduate School of Journalism.In 2022, Eugene broke a story uncovering Amazon’s practice of deceptively enrolling customers in Prime and deliberately making cancellation difficult. A year later, the Federal Trade Commission sued the company, citing his reporting. That case culminated in a record $2.5 billion settlement in 2025.His reporting has earned multiple honors, including the SF Press Club’s Bay Area Journalism Award and SPJ NorCal’s Excellence in Journalism Award.Eugene lives in the Bay Area. Contact him via email at [email protected], or Signal, Telegram, or WhatsApp at 650-942-3061. Use a personal email address, a nonwork WiFi network, and a nonwork device; here's our guide to sharing information securely. ExpertiseAmazon, Jeff Bezos, Andy Jassy, e-commerce, and cloud computing.Popular ArticlesAmazon:Internal Amazon emails give an exclusive look at how CEO Andy Jassy has started to run the company, with obsessive attention to the retail business and what some employees feel is micromanagingAndy Jassy will be the next CEO of Amazon. Insiders dish on what it's like to work for Jeff Bezos' successor, who built AWS into a $40 billion business.Internal documents show Amazon has for years knowingly tricked people into signing up for Prime subscriptions. 'We have been deliberately confusing,' former employee says.Inside Amazon's flailing brick-and-mortar ambitions: missed projections, pressure to cut costs, and a war with Whole FoodsInside Amazon's complex employee-review system, where workers feel left in the dark and managers expect to give 5% of reports bad reviewsAfter 28 years, 'Day 2' finally arrives at AmazonAWS, Alexa, healthcare:Inside Amazon's struggle to break into the lucrative market for SaaS business applications, including an internal pitch to buy $38 billion HubSpotInside Amazon's struggle to crack Nvidia's AI-chip dominanceAmazon's AI data center dream runs into the reality of 'zombie' facilities, higher costs, and labor shortagesAmazon is gutting its voice assistant, Alexa. Employees describe a division in crisis and huge losses on 'a wasted opportunity.'Amazon is working on a new 'Remarkable Alexa,' but internal politics and technical issues plague the projectAmazon projected huge losses from its healthcare business in 2024, but strong sales growth, internal document reveals
Amazon Alexa AI More AWS Anthropic Generative AI Exclusive
In the latest trading session, Amazon (AMZN - Free Report) closed at $244.85, marking a -1.09% move from the previous day. The stock trailed the S&P 500, which registered a daily loss of 0.14%. Elsewhere, the Dow lost 0.01%, while the tech-heavy Nasdaq lost 0.57%.
The online retailer's shares have seen an increase of 5.74% over the last month, surpassing the Retail-Wholesale sector's gain of 0.45% and the S&P 500's gain of 0.25%.
The investment community will be closely monitoring the performance of Amazon in its forthcoming earnings report. The company is scheduled to release its earnings on July 30, 2026. In that report, analysts expect Amazon to post earnings of $1.82 per share. This would mark year-over-year growth of 8.33%. Meanwhile, the latest consensus estimate predicts the revenue to be $196.85 billion, indicating a 17.38% increase compared to the same quarter of the previous year.
In terms of the entire fiscal year, the Zacks Consensus Estimates predict earnings of $8.93 per share and a revenue of $826.74 billion, indicating changes of +24.55% and +15.32%, respectively, from the former year.
Investors should also take note of any recent adjustments to analyst estimates for Amazon. These revisions help to show the ever-changing nature of near-term business trends. Hence, positive alterations in estimates signify analyst optimism regarding the business and profitability.
Our research reveals that these estimate alterations are directly linked with the stock price performance in the near future. To utilize this, we have created the Zacks Rank, a proprietary model that integrates these estimate changes and provides a functional rating system.
The Zacks Rank system, which varies between #1 (Strong Buy) and #5 (Strong Sell), carries an impressive track record of exceeding expectations, confirmed by external audits, with stocks at #1 delivering an average annual return of +25% since 1988. The Zacks Consensus EPS estimate has moved 0.49% higher within the past month. At present, Amazon boasts a Zacks Rank of #2 (Buy).
In the context of valuation, Amazon is at present trading with a Forward P/E ratio of 27.72. For comparison, its industry has an average Forward P/E of 17.14, which means Amazon is trading at a premium to the group.
Meanwhile, AMZN's PEG ratio is currently 1.6. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. As of the close of trade yesterday, the Internet - Commerce industry held an average PEG ratio of 1.12.
The Internet - Commerce industry is part of the Retail-Wholesale sector. This industry currently has a Zacks Industry Rank of 161, which puts it in the bottom 35% of all 250+ industries.
The Zacks Industry Rank gauges the strength of our industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.
Don't forget to use Zacks.com to keep track of all these stock-moving metrics, and others, in the upcoming trading sessions.
Amazon Earnings: What Wall Street Will Be WatchingThe brokerage reiterated its Buy rating and $310 price forecast, citing improving AI positioning, accelerating AWS growth and continued momentum in generative AI services as potential catalysts for the stock in the second half of 2026.
Bank of America now expects Amazon to report second-quarter revenue of $198.8 billion and operating income of $24.1 billion, above Wall Street consensus estimates of $196.8 billion and $23.6 billion, respectively.
The firm also raised its AWS revenue growth forecast to 33% year over year, up from its prior estimate of 31%, driven by growing demand from Anthropic, OpenAI-powered Bedrock services and broader enterprise AI adoption.
AWS Growth Remains The Key FocusAnalysts expect Amazon’s third-quarter revenue guidance to range between $200.5 billion and $205.5 billion, roughly bracketing Street expectations.
They noted that an earlier-than-usual Prime Day will likely create a headwind for third-quarter retail comparisons after shifting some sales into the second quarter.
The firm said investors should focus less on headline earnings and more on AWS growth, cloud margins, AI backlog expansion and commentary around capital spending.
Bank of America believes Amazon’s cloud business continues to strengthen relative to competitors, supported by Bedrock adoption, Trainium chips and growing AI workloads.
AI Spending And Anthropic PartnershipThe brokerage also said Amazon could increase its 2026 capital expenditure outlook to about $210 billion because of higher memory costs and additional AI infrastructure investment.
While that could weigh on near-term sentiment, analysts said stronger cloud demand and improving AI monetization should outweigh those concerns over time.
Bank of America added that Amazon’s expanding relationship with Anthropic could further boost results. The firm estimates Anthropic-related workloads alone could contribute more than $1.5 billion in sequential AWS revenue growth during the quarter, while Amazon’s stake in the AI startup could generate a significant mark-to-market gain.
Wall Street Remains Bullish Ahead Of EarningsAmazon is scheduled to report second-quarter results on July 30.
Wall Street expects earnings of $1.82 per share, up from $1.68 a year earlier. Revenue is projected to reach $196.02 billion, compared with $167.70 billion in the prior-year quarter.
The stock trades at about 29.6 times forward earnings. Analysts maintain a Buy consensus rating with an average price forecast of $320.10. Recent analyst actions include:
Wells Fargo reiterated Overweight and raised its price forecast to $322 on July 21. KeyBanc maintained Overweight and increased its price forecast to $335 on July 16. Wedbush reiterated Outperform with a $293 price forecast on July 16. Amazon ETF ExposureAmazon is a major holding in several exchange-traded funds, including:
Large fund flows into or out of these ETFs can influence Amazon’s share price because of its significant portfolio weighting.
Amazon Price ActionAMZN Stock Price Activity: Amazon.com shares were down 1.47% at $243.91 at the time of publication on Wednesday, according to Benzinga Pro data.
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Item 1 of 2 The logo of Amazon is pictured at a company logistics center in Carquefou near Nantes, westren France, May 6, 2026. REUTERS/Stephane Mahe
[1/2]The logo of Amazon is pictured at a company logistics center in Carquefou near Nantes, westren France, May 6, 2026. REUTERS/Stephane Mahe Purchase Licensing Rights, opens new tab
SAN FRANCISCO, July 22 (Reuters) - Amazon (AMZN.O), opens new tab on Wednesday cut jobs in its artificial general intelligence group, marking the latest in a series of smaller reductions across the company since a much larger one in January.
Artificial general intelligence is a hypothetical AI system that surpasses human intelligence and can learn, grow and operate autonomously. Many of the top AI companies are working to develop similar systems, with the hope of deploying them to solve difficult problems.
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"We've been building large AI models for several years, and it remains one of the most important things we're working on," said an Amazon spokesman following a Reuters inquiry. "We’re sharpening our focus on the initiatives that matter most for customers, so we can move faster on what counts. That focus means some difficult decisions, including eliminating some roles within parts of our AGI organization."
Rohit Prasad, a top Amazon executive overseeing AGI, left the company at the end of last year and the head of its AGI Lab, David Luan, left in February. AGI work was consolidated under senior vice president Peter DeSantis in December as part of a larger group that also includes silicon development and quantum computing.
Employees under Adeeb Shanaa, vice president of artificial general intelligence data services, and Vishal Sharma, vice president of AGI information, reported being impacted by the cuts on online forums on Wednesday. However, the full scope of the cuts could not immediately be learned.
Amazon cut 16,000 jobs across the company in January.
Reporting by Greg Bensinger; Editing by Chizu Nomiyama, Kirsten Donovan
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Greg Bensinger joined Reuters as a technology correspondent in 2022 focusing on the world's largest technology companies. He was previously a member of The New York Times editorial board and a technology beat reporter for The Washington Post and The Wall Street Journal. He also worked for Bloomberg News writing about the auto and telecommunications industries. He studied English literature at The University of Virginia and graduate journalism at Columbia University. Greg lives in San Francisco with his wife and two children.
Amazon uzavřel s italskými odbory první celostátní kolektivní dohodu v zemi, která upravuje dovolenou, pracovní podmínky a video dohled na 57 pracovištích. Zahrnuje i rodičovskou dovolenou po hodinách.
Amazon logo outside an Amazon warehouse in Manchester, Britain, October 28, 2025. REUTERS/Phil Noble/File Photo Purchase Licensing Rights, opens new tab
CompaniesMILAN, July 22 (Reuters) - Italian unions have signed an agreement with Amazon.com (AMZN.O), opens new tab covering leave, employee rights and video surveillance, the unions and the U.S. e-commerce giant said on Wednesday.
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The Filt CGIL, Fit CISL and Uiltrasporti unions said 57 sites operating in Italy were covered in the deal struck with Amazon Italia Transport and Amazon Italia Logistica and hailed it as the first such national collective agreement reached with Amazon in any country.
Regarding video surveillance, the unions said it has been agreed that images cannot be used for disciplinary purposes.
Employees have been granted the right to take parental leave in increments as small as a single hour, the unions added.
"We welcome the agreement reached with trade unions, which introduces new flexibility and work-life balance tools and enhances existing ones, bringing them into a shared framework for the benefit of our employees and their families," Amazon said in a statement.
The agreement builds on an initial protocol signed with Amazon in 2021.
Amazon has 19,000 permanent employees in Italy.
Writing by Keith Weir, editing by Alvise Armellini
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Amazon je podle článku podhodnocený a těží z 28% meziročního růstu AWS v 1. čtvrtletí 2026, což odpovídá anualizovanému vyjádření 150 miliard USD. Trh ale dál řeší rekordní capex a tlak na volný peněžní tok.
At $254.96, Amazon (NASDAQ:AMZN | AMZN Price Prediction) screens as undervalued. The stock has recovered 10.46% year to date while Wall Street debates whether $200 billion in annual capex is genius or lunacy. The fundamentals say genius.
Amazon runs the largest cloud infrastructure business on the planet, the largest online marketplace in the West, a $70 billion advertising engine, and a custom silicon operation that management says would generate a $50 billion run rate if sold standalone. AWS delivered 28% year-over-year growth in Q1 2026, the fastest pace in 15 quarters, on a $150 billion annualized base. The market prices this like a mature retailer, while the underlying business mix is a growth compounder.
Why Amazon Looks Cheap for What It Actually Is Custom silicon arbitrage: Trainium delivers about 30% better price performance than comparable GPUs, Trainium3 is nearly fully subscribed, and Amazon holds over $225 billion in Trainium revenue commitments. Jassy said at scale the program will deliver “tens of billions of dollars of CapEx” in savings each year plus several hundred basis points of margin advantage. Amazon is renting NVIDIA capacity to customers while stacking its own zero-marginal-cost silicon underneath.
Capex land grab: Prediction markets assign a 96.7% probability that 2026 capex clears $190 billion. That spend locks in multi-gigawatt commitments from OpenAI (2 GW of Trainium), Anthropic (up to 5 GW), and Meta. AWS backlog stands at $364 billion, excluding Anthropic’s $100 billion deal.
Bedrock as enterprise nervous system: It serves over 125,000 customers, nearly 80% of the Fortune 100, and processed more tokens in Q1 than all prior years combined. Customer spend grew 170% quarter over quarter.
The Bear Case: Cash Flow Is Cratering Trailing free cash flow collapsed 95% to $1.2 billion. Long-term debt jumped to $119.1 billion from $65.6 billion, and Amazon is tapping the bond market for at least $25 billion more. AWS operating margin compressed to 37.7% from 39.5%. Q1 net income was flattered by $16.8 billion in non-recurring Anthropic gains.
The Hold Case: Wait for the Capex Curve to Bend Amazon’s capex will not peak in 2026. Data-center leases take six to 24 months to monetize, and depreciation is front-loaded against ramping revenue. A patient investor could wait for the free cash flow inflection in 2027. The stock trades at a forward P/E of 29, not screamingly cheap, and one-year performance of 12.64% lags the S&P 500’s 21.32%.
What the Numbers Actually Say Amazon trades at $254.96 against an analyst consensus target of $314.27, implying roughly 23% upside. Coverage is deep with 66 analysts: 15 Strong Buy, 47 Buy, 4 Hold, and zero Sell ratings. Year to date AMZN is up 10.46% against the S&P 500’s 10.69%, matching the index despite the heaviest capex load in the sector.
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The trailing P/E of 29 sits near a decade low. Jefferies named Amazon its top hyperscaler pick with a $320 target.
The Setup: A Rare Configuration at a Reasonable Multiple At $254.96, Amazon looks mispriced relative to its growth profile.
The path to appreciation is mechanical. AWS is compounding 28% on a $150 billion base, Trainium demand is contractually locked through Trainium4 in 2027, and Bedrock is the default AI stack for 80% of the Fortune 100. That combination usually commands a premium multiple. Amazon currently trades at a discount to peers with slower growth profiles.
A P/E of 29 on a business growing operating income 29.6% with a $364 billion visible backlog is asymmetric. Downside is bounded by prediction-market conviction that shares hold the $240 to $245 range with better than 90% probability, while the consensus target implies 23% upside.
What invalidates the thesis: an AWS deceleration below 20%, margin compression through 35%, or evidence that Trainium bookings are slipping. None of that is currently visible.
Amazon is spending like a monopolist because it is building one, and the market is still pricing it like a retailer.
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Amazon čeká, že AWS ve 2. čtvrtletí zrychlí růst tržeb na 35,5 % meziročně. To by podle TD Cowen potvrdilo, že investice do AI infrastruktury už se promítají do výnosů.
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52-Week Range$196.00▼
$278.56P/E Ratio30.20
Price Target$312.76
For most of this year, the conversation around Amazon.com Inc. NASDAQ: AMZN has been dominated by one uncomfortable question: Will all that AI spending ever pay off? The company's enormous infrastructure buildout has compressed free cash flow, unsettled the bond market, and left investors waiting for hard evidence that the money is translating into growth.
That wait may be about to end. Ahead of its next earnings report on July 30, some analysts are forecasting a sharp acceleration in AWS revenue growth, comfortably outpacing the wider market expectations. If the numbers land anywhere close to that, it would be exactly the proof point the bulls have been asking for.
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The Forecast That Changes the ConversationIn a note to clients earlier this month, TD Cowen said it expects AWS revenue growth to reach 35.5% year over year in the second quarter, up from 28.4% in the same period last year and several percentage points above consensus estimates. For a business of AWS's scale, that kind of acceleration is remarkable, and it would mark a decisive break from the narrative that cloud growth had plateaued.
The driver capacity is finally catching up with demand. Amazon's heavy investment in AI infrastructure has begun easing the supply constraints that were holding it back, meaning capacity that simply wasn't available before is now coming online and converting directly into revenue from generative AI workloads.
That distinction matters enormously. The bear case has long held that Amazon was spending speculatively into an uncertain future. An AWS acceleration of this magnitude, arriving now rather than in a year or two's time, would suggest the opposite: that the company has been building to meet demand it could already see.
Why This Would Settle a Bigger ArgumentOverall MarketRank™95th Percentile
Analyst RatingModerate Buy
Upside/Downside25.0% Upside
Short Interest LevelHealthy
Dividend StrengthN/A
News Sentiment0.79 Insider TradingSelling Shares
Proj. Earnings Growth30.45%
See Full Analysis
To understand why a single quarter could carry this much weight, it helps to remember what the debate has actually been about. Nobody has seriously questioned whether AI infrastructure demand exists. The question has been whether Amazon specifically can convert its spending into revenue fast enough to justify the pressure it has been putting on the balance sheet.
Free cash flow has taken a visible hit as capital expenditure (CapEx) has climbed, and the company's recent bond raise drew noticeably softer demand than earlier rounds of AI-related debt issuance. Both of those are symptoms of a market that wants to see returns before it extends more patience.
An AWS growth number in the mid-thirties would go a long way toward providing them. It would demonstrate that the capacity being built is consumed almost as quickly as it comes online, reframing the CapEx story from a worrying outflow to an investment with a visible payback.
The Retail Engine Is Quietly Accelerating TooLost in all the focus on cloud is the fact that Amazon's core retail business appears to be picking up pace as well. TD Cowen expects North American revenue growth to come in meaningfully ahead of the first-quarter result, driven by faster delivery speeds and continued strength in everyday essentials.
That matters more than it might first appear. One of the quieter concerns about the AI buildout has been whether it would distract management from the business that actually funds it. An acceleration on the retail side would suggest the opposite: that Amazon is running both playbooks at once without either suffering for it.
It also speaks to the durability of the wider growth opportunity. AWS may be where the excitement sits, but Amazon’s retail and logistics operations remain the foundation on which everything else is built, and evidence that it's strengthening rather than plateauing gives the bulls another reason to be excited ahead of the report.
What Could Still Go Wrong on July 30To be sure, none of this anticipated upside surprise is guaranteed, and the report could still disappoint even with strong AWS numbers. The most obvious is on the spending side. If capital expenditure guidance climbs again, or if management signals that the buildout will run longer and heavier than expected, investors may focus on cash outflows rather than revenue acceleration.
Margins are the other variable. Rapid AWS growth is only bullish if it comes with the profitability the market associates with the segment, and any sign that the cost of serving AI workloads is compressing returns would take the shine off the headline number.
Get both right, though, and the setup is compelling. A market that has spent months worrying about what Amazon is spending would suddenly be confronted with clear evidence of what that spending is buying. After months of frustrating price action, that could easily be enough to push the stock back toward all-time highs.
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The AI wave will soon hit public markets with Anthropic and OpenAI set to go public later this year. However, you don't have to wait to invest. This report shows seven AI stocks that you can buy today while the big model providers get ready to go public.
Amazon plánuje v roce 2026 investovat zhruba 200 miliard USD do AI a Andy Jassy říká, že nejde o sázku „naslepo“. Opírá se o Trainium, které běží nad ročním tempem výnosů 20 miliard USD a má přes 225 miliard USD v závazcích.
When a company announces the largest single-year infrastructure spend in corporate history, investors are right to get nervous. Amazon (AMZN 0.91%) plans to pour roughly $200 billion into capital spending in 2026, most of it aimed at artificial intelligence (AI), and CEO Andy Jassy knows how that sounds.
His response was blunt: The company is not making that bet "on a hunch." The clearest evidence that he is telling the truth sits inside Amazon's own chip business.
Amazon CEO Andy Jassy. Image source: Amazon.
The proof is in the chips Amazon designs its own AI chips, led by a line called Trainium, and that custom silicon operation has quietly become a real business. It recently exited a quarter at an annual revenue pace above $20 billion, and this segment of the overall business is growing at triple-digit percentages. It is one of the fastest-scaling chip operations anywhere.
Even more telling is how much future demand is already locked in. Amazon says it has more than $225 billion in revenue commitments tied to Trainium alone, with major AI developers signing on for substantial capacity.
When customers commit that kind of money in advance, it tells you the spending is chasing real, contracted demand rather than a guess about what might sell someday. That is what Jassy is saying.
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Why Trainium matters beyond the revenue The chips do something else that helps the math work. Amazon's newer Trainium processors offer meaningfully better performance for the price than the third-party graphics chips most companies rent, and recent versions have largely sold out. By using its own silicon rather than buying everything from Nvidia, Amazon can lower its costs and widen its profit margins over time.
In other words, the $200 billion is not only about serving customers but also about building a cheaper, more controlled AI supply chain that Amazon owns end-to-end.
None of this makes the bet safe -- $200 billion is an extraordinary sum, and Amazon is counting on monetizing much of it in 2027 and beyond, so the payoff is not immediate. If AI demand cools or customers delay, that spending could weigh on profits. Competition from Nvidia and other cloud providers is fierce, and building chips is hard.
Amazon's AI spending is enormous, but it is backed by a chip business already running at a $20 billion pace and a mountain of pre-committed revenue. To me, that turns a scary headline number into something closer to a calculated bet. The spending still has to pay off, but Jassy has given investors real reasons to believe it is grounded in demand rather than hope.
Elon Musk přiznal, že se v Anthropic mýlil, a označil ji za současného lídra v AI. Pro Amazon a Alphabet to posiluje hodnotu jejich podílů i budoucích zakázek na cloud a čipy.
Elon Musk doesn't hand out compliments to rivals often, which is why his recent about-face turned heads. After dismissing the AI start-up Anthropic last year, Musk posted that he "was clearly wrong" and now considers it "obviously currently the leader in AI," praising its latest Claude models as the strongest yet. That is a striking admission from a competitor. But the investors who should really pay attention are not watching Musk. They are shareholders of Amazon (AMZN 0.91%) and Alphabet (GOOGL 2.05%).
Musk had written a year ago that "winning was never in the set of possible outcomes for Anthropic." Reversing that in public, and calling Anthropic the outright leader, is the kind of validation money can't easily buy. It came after Anthropic raised an enormous funding round and shipped models that impressed even skeptics. When the person running a competing AI lab concedes your product is the best, the market listens.
Tesla CEO Elon Musk. Image source: The White House.
Why Amazon and Alphabet are the real winners Here's the connection most headlines miss: Amazon and Alphabet are two of Anthropic's largest backers. Alphabet owns roughly 14% of the company, and Amazon holds a stake in the mid- to high teens, positions each worth well over $100 billion at Anthropic's latest valuation near $965 billion. Amazon alone had committed around $33 billion, with a pledge to invest tens of billions more as milestones are hit. If Anthropic is truly the AI leader, those stakes could swell further, especially with the company reportedly heading toward a blockbuster IPO.
The equity is only half the story, though. Anthropic has committed to spending more than $100 billion on Amazon Web Services over the next decade, including heavy use of Amazon's custom Trainium chips, and roughly $200 billion on Google Cloud over five years, potentially leaning on Alphabet's own AI accelerators. So both giants win twice: their investment appreciates, and the AI leader becomes an anchor customer funneling tens of billions into their cloud businesses. That is a rare double benefit, and Musk's endorsement only strengthens the case that Anthropic will keep growing into those commitments.
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The catch investors should weigh I wouldn't get carried away, though, because there's a real wrinkle here. A large chunk of the eye-popping "AI profits" Amazon and Alphabet have reported recently came from marking up the value of their Anthropic stakes, not from selling more products. Amazon booked billions in pretax gains in a single quarter simply because Anthropic's paper valuation rose. Paper gains are nice, but they aren't the same as durable operating earnings, and they can reverse just as quickly if the AI mood sours.
There's also a whiff of circularity worth acknowledging. Amazon and Alphabet invest in Anthropic, and Anthropic turns around and spends that money on their cloud services and chips. That can inflate everyone's numbers in the good times, but it also means the whole arrangement leans on a continuation of the AI boom. Anthropic itself is still spending enormously and is not a mature, profitable business. And its nearly $1 trillion private valuation leaves little room for disappointment.
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The takeaway for investors Musk's admission is more than a bit of tech-world drama. It's a high-profile confirmation that Anthropic, a company quietly underpinning two of the market's biggest stocks, is winning. For Amazon and Alphabet shareholders, that means their exposure to the AI race runs deeper than the chatbots and cloud tools you can see, extending into a stake that could be worth hundreds of billions and a customer relationship worth hundreds of billions more.
My honest take is that this is a genuine, underappreciated strength for both companies, but investors should hold it in perspective. Enjoy the upside from owning a piece of the AI leader, while remembering that a big slice of the recent gains are marks on paper, not cash in the bank. The businesses underneath still have to deliver.
Amazon prodal dluhopisy za 25 miliard USD na financování výstavby datových center a dává tím jasně najevo, že sází na rozvoj AI. Firma zároveň plánuje letos investice do datových center za 200 miliard USD.
Amazon (AMZN 0.90%) just completed a large bond sale, and it's a direct sign of where CEO Andy Jassy is pointing the company. Amazon sold $25 billion worth of bonds to finance its data center build-out, telling investors it's going all in on the artificial intelligence (AI) build-out.
This is a big deal because there have been some concerns proliferating over the past month about the health of the AI build-out trend. This bond sale is a solid indicator that the trend is robust, so investors can refocus on what Amazon's future will look like as an AI-first infrastructure company.
Image source: Amazon.com Inc.
Jassy has some insight into what's coming In Jassy's annual letter to investors, he made the case for Amazon spending $200 billion on data center capital expenditures this year. One major factor he discussed was that the faster a cloud computing business grows, the more money it has to spend to build the data centers and purchase the chips necessary to run the workloads. Plus, he reiterated that Amazon's investments aren't being made on blind faith; the company has secured several data center clients that will start using the new computing capacity being developed the first day it's available.
That should calm investors' nerves a bit, as Amazon is doing everything right to secure a long-term opportunity in the cloud computing market.
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Another factor that could set Amazon apart is its custom AI chips. Amazon Web Services (AWS) has already been successful in developing in-house Graviton central processing units (CPUs) for data centers, and its Trainium chips could also be a huge advantage, as Amazon has touted their cost effectiveness over graphics processing units for AI training workloads. It can't fully finance its ambitious expansion plans with its current cash flows, so Amazon is doing the right thing by issuing debt to secure this opportunity, even if some investors don't like it.
However, with Amazon becoming a more cloud-focused business, the stock looks even more attractive.
AWS' operating margins are far superior to those of Amazon's commerce divisions. This is evidenced by the fact that AWS accounted for 59% of operating profit in the first quarter, despite making up only 21% of revenue. As this division grows faster on the back of the company's increasingly large capital investments, Amazon's profits will likely soar, making the stock a no-brainer buy at today's levels. I think that Amazon's transformation into a cloud-focused business will surprise a lot of investors, and that the upside in the stock is real and immense.
Keithen Drury has positions in Amazon. The Motley Fool has positions in and recommends Amazon. The Motley Fool has a disclosure policy.
Zoox stáhla aktualizaci softwaru u 105 robotaxi poté, co její vůz v Las Vegas nezachytil hustý kouř a vjel do aktivní zásahové scény. Firma uvedla, že šlo o jediný takový případ a nikdo nebyl zraněn.
Amazon-owned Zoox recalled software in 105 of its robotaxis over concerns its vehicles failed to detect heavy smoke and drove into it.
Zoox notified the National Highway Traffic Safety Administration of the recall on July 8 and said it became aware of the smoke detection issue following an incident last month.
On June 20, an unoccupied Zoox robotaxi encountered heavy smoke that obscured an active emergency fire scene that was not cordoned off with cones, the company wrote in its report. The vehicle entered the scene, then braked hard while attempting to steer away before coming to a stop, Zoox said.
The company said the incident took place in Las Vegas.
A Zoox teleguidance employee instructed the vehicle to reverse, then first responders placed traffic cones to block off the scene, according to the report.
Zoox said it investigated the incident and determined it's "the only event of this kind" that has occurred. No injuries were identified.
Read more CNBC tech newsElon Musk's Memphis AI empire is the epicenter of the data center backlashChinese startup Moonshot AI unveils Kimi model it says rivals OpenAI, AnthropicSpaceX stock falls after Starship test flight abortedMicrosoft's Nadella criticizes Anthropic's Fable for being 'editorially controlled'Amazon acquired Zoox for $1.3 billion in 2020. The company operates driverless buggies that have no steering wheel or pedals, and feature four carriage-style seats that face inward, giving them a shuttle-like atmosphere.
Zoox currently offers free rides in parts of Las Vegas and San Francisco, and it's allowing select users to hail its robotaxis in small zones in Miami and Austin, Texas. Testing is also underway in six other U.S. cities.
The voluntary recall comes after NHTSA Administrator Jonathan Morrison last week issued a directive to autonomous vehicle developers to ensure their vehicles get out of the way of first responders.
Morrison said in the letter that the agency has "identified a clear pattern of driverless AVs interfering with law enforcement and other first responders," citing incidents where AVs drove into active emergency scenes, blocked the paths of ambulances or firefighters, or failed to recognize or respond to flashing lights, flares, smoke, fire and traffic cones.
He called on AV developers and operators "to immediately focus their resources on fixing this issue" and present their solutions to the agency by the end of the month. The letter doesn't name specific AV companies.
Zoox issued several software recalls last year to address issues over lane crossings, as well as its ability to predict the movement of other vehicles and pedestrians.
The company is racing to catch up to Alphabet's Waymo, which is the dominant robotaxi service in the U.S., with a fleet of about 4,000 automated vehicles in the country.
Last month, Waymo recalled about 3,900 robotaxis after some of its vehicles drove into closed construction zones on freeways, increasing "the risk of a crash."
Amazon uvedl, že opravuje chybu v AWS fakturačním portálu, která některým zákazníkům zobrazila účty v řádu milionů nebo miliard dolarů. Podle firmy nejde o skutečné využití ani poplatky.
Image Credits:TechCrunch Some Amazon cloud customers woke up on Friday to a surprise bill estimate that said they owed billions of dollars for cloud services they had never used.
Amazon confirmed on Friday that it’s trying to resolve a bug in its Amazon Web Services (AWS) billing portal that showed some customers “owed” millions or billions in cloud computing costs.
In an update on its status page, Amazon said it began seeing inaccurate billing data as of late Thursday. But by Friday morning, the company conceded that the “rollback of a recent change did not resolve the issue.” Amazon said the change relates to its billing computation subsystem.
The good news for the customers who were told they “owe” millions or billions to Amazon is they are likely off the hook. The billing estimates “do not reflect actual usage and charges,” Amazon said.
According to several screenshots posted by Amazon customers on Reddit, one customer was quoted a billing estimate of close to $2.5 billion for this month’s AWS usage, while others had similar alerts, ranging from a few million dollars to hundreds of millions of dollars.
A spokesperson for Amazon did not immediately return a request for comment. The issue is expected to last several more hours, per Amazon’s status page.
Amazon stock has struggled to keep pace with the broader market this year as investor sentiment toward hyperscalers has cooled. AMZN is up about 8% year to date and just 10% over the past 12 months, lagging many large-cap peers.
However, the stock could regain momentum later this year if investors rotate back into hyperscalers amid renewed optimism about AI spending, cloud growth, and earnings.
AMZN stock price has underperformed the market this year as investors remained concerned about its spending and whether it will achieve a return on investment (ROI).
The company has been spending billions of dollars in data centers. It plans to spend over $200 billion this year, a figure that may continue growing as memory, servers, and chip prices surge.
The next key catalyst for the company is its earnings, which are expected to come out on July 30th. These earnings will provide an overview of how its business performed last quarter, and whether its cloud business is still growing.
The last financial results showed that its sales jumped by 17% in the first quarter to $181 billion. Excluding its forex benefits, the company’s sales rose by 15% from the same period last year.
By segment, is international sales rose by 19%, while AWS jumped by 28% to $37.8 billion. Its North America segment jumped by 12% to $104 billion, as retail spending growth continued.
Most notably, despite its strong spending, Amazon’s operating income rose to over $23.9 billion, with AWS leading the pack with $14.2 billion. However, the key blemish in the report was its free cash flow, which plunged to $1.2 billion in the trailing twelve months as it boosted its spending.
There were a few notable statements in the report. For one, the company’s chip business, which is made up of Graviton, Terranium, and Nitro, made $20 billion in annual revenue run rate. It also inked a deal with OpenAI to consumer about 2 GW of Tranium capacity.
The upcoming earnings report is expected to show that revenue jumped by 16.8% in the second quarter to over $195 billion. Notably, the IWS division is expected to grow by about 25% as the company’s market share in the cloud computing sector remains.
For the year, the company’s revenue is expected to grow by 15% to $823 billion, followed by $930 billion next year.
There are signs that the company has become highly overvalued, with the forward price-to-earnings ratio hitting 29. Its multiple is much higher than the sector median of 15.
Most Wall Street analysts remain bullish on Amazon stock. The average price target is $312, implying about 25% upside from the current level. Among the most optimistic forecasts, KeyCorp has a $335 target.
Meanwhile, Wedbush, Citigroup, and Citizens maintain Outperform, Buy, and Market Outperform ratings, respectively, reflecting continued confidence in the company's long-term growth prospects.
READ MORE: Is Big Tech's $725B AI splurge being funded by mass layoffs?
AMZN stock chart | Source: TradingView
The daily chart shows that the AMZN stock has crawled back in the past few days, moving from a low of $225 earlier this month to the current $250. It has already crossed the 50-day and 100-day moving average and formed an inverted head-and-shoulders pattern.
It is also hovering around the 23.6% Fibonacci Retracement level. Therefore, the stock will likely bounce back in the near term as investors start rotating from memory and semiconductor companies to hyperscalers. If this happens, the next key target to watch will be the year-to-date high of $278.
Amazon (AMZN 1.99%) CEO Andy Jassy put a striking number on one of his company's least-discussed businesses this spring. If Amazon's in-house chip operation were a stand-alone company that sold the chips it produces to outside buyers, he said on the company's first-quarter earnings call in April, its annual revenue run rate would be about $50 billion.
The business as it actually runs today is no small thing either. Amazon's custom chip unit -- Graviton processors, Trainium artificial intelligence (AI) accelerators, and Nitro networking chips, all deployed inside Amazon Web Services (AWS) -- has an annual revenue run rate above $20 billion, growing at triple-digit percentage rates year over year.
And customers have lined up. Jassy said in the company's first-quarter earnings call that it now holds more than $225 billion in revenue commitments for Trainium.
Numbers like those suggest Amazon is building something bigger than an internal cost-saving project. Here's a closer look at the chip business, and what it could mean for the stock.
Image source: Amazon.com Inc.
A $20 billion business inside AWS Amazon's chips business grew nearly 40% quarter over quarter in the first quarter alone, Jassy said on the earnings call. And as best the company can tell, he added, its custom silicon operation is now "one of the top three data center chip businesses in the world."
The $225 billion commitment figure comes with recognizable names attached. Amazon's first-quarter report disclosed a commitment from OpenAI to consume approximately two gigawatts of Trainium capacity beginning in 2027, and an agreement under which Anthropic will secure up to five gigawatts of current and future generations of Trainium chips. Uber is using Graviton chips to match riders with drivers. And Meta Platforms signed on to deploy tens of millions of Graviton cores.
Demand is running ahead of supply, too.
"Our Trainium2 chip has about 30% better price-performance than comparable GPUs, and has largely sold out," Jassy said on the call. Trainium3, which started shipping at the beginning of 2026, is nearly fully subscribed. And much of Trainium4, still more than a year from broad availability, has already been reserved.
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A challenger to Nvidia, within limits Of course, Nvidia is still much bigger. Its graphics processing units (GPUs) dominate AI data centers, and Amazon itself remains a huge Nvidia customer -- the same first-quarter report that touted Trainium also announced plans to deploy more than 1 million Nvidia GPUs starting in 2026.
Trainium's selling point is cost per unit of computing, and Amazon offers its chips only through AWS.
Jassy's $50 billion figure is also a hypothetical. It describes what the business would look like if Amazon sold its chips on the open market the way other chipmakers do, which today it mostly doesn't. Amazon doesn't break out the unit's profits, either, so investors can't yet see what all this silicon earns.
But the chip momentum sits inside a cloud business that is accelerating. AWS revenue grew 20% for all of 2025, then 24% in the fourth quarter, then 28% in the first quarter of 2026, reaching $37.6 billion -- growth Jassy called the segment's fastest in 15 quarters. AWS also produced $14.2 billion of operating income in the first quarter, up 23% from $11.5 billion a year earlier.
That growth is expensive. Amazon expects about $200 billion in capital expenditures across the company in 2026, and its free cash flow for the trailing 12 months fell to $1.2 billion from $25.9 billion a year earlier as AI investments ramped up.
The spending is the main risk here. If demand for AI computing cools before these investments pay for themselves, Amazon's profits and its stock could suffer.
Still, the stock arguably isn't asking investors to pay much for the chip business. At about $255 per share as of this writing, Amazon trades at about 30 times earnings, though earnings get a boost from a $16.8 billion pre-tax gain on the company's Anthropic investment booked in the first quarter. Excluding it, the multiple would be somewhat higher. Even so, shares are up a modest 10% or so this year while AWS accelerates.
Ultimately, I don't think Trainium needs to beat Nvidia for Amazon shareholders to win. A chip business with a $20 billion run rate, triple-digit growth, and $225 billion in commitments strengthens the case for a stock priced like this while its biggest profit engine accelerates. I already liked Amazon at this price. The chip business is one more reason.
AWS v 1. čtvrtletí zvýšila tržby meziročně o 28 % a backlog vzrostl na 364 miliard USD, tedy o 49 % oproti předchozím třem měsícům. Amazon letos plánuje kapitálové výdaje ve výši 200 miliard USD.
Amazon (AMZN 1.92%) brought in a jaw-dropping $182 billion in revenue in the first three months of 2026. While the majority of this sum came from its retail operations, the market undoubtedly spends more time focused on the company's cloud division, Amazon Web Services (AWS).
This isn't surprising. AWS posted a 28% year-over-year revenue gain in Q1, its fastest growth pace in more than three years. And AWS' operating income accounts for 59% of the overall company's total. These are impressive trends.
But investors should take a deeper look at the AWS growth story.
Image source: Amazon.
Double-click on the backlog metric Andy Jassy, who has been CEO of Amazon since taking over from founder Jeff Bezos in July 2021, highlighted the huge opportunity that the cloud segment is facing. As he wrote in his 2025 shareholder letter, "85% of global IT spend remains on-premises."
In recent years, the artificial intelligence (AI) market has taken a central position in the financial picture. "Our AI revenue is growing triple digits year over year," Chief Financial Officer Brian T. Olsavsky said on the Q1 earnings call. It's hard not to be bullish about the company after reading this.
The market places a lot of attention on a single metric for cloud computing leaders like Amazon: backlog, which indicates contracted (but not yet delivered) demand from customers. AWS had a $364 billion backlog as of March 31, up 49% from three months before.
And that figure didn't include the 10-year $100 billion deal with Anthropic signed in April. But it did include OpenAI's $138 billion spending commitment over the next eight years. These are the two most prominent AI labs out there, and both are weighing initial public offerings that would value the companies at more than $1 trillion.
The outlook for AWS is highly reliant on the ability of these two start-ups to fulfill their spending commitments. This puts its backlog on shakier ground.
As of May, Anthropic and OpenAI had a combined annualized revenue run rate of $72 billion. Their total yearly spending commitment to AWS of about $27 billion amounts to 38% of this sales figure. This isn't a cause for concern at first glance.
However, this doesn't count their spending obligations with other cloud providers, measured in the hundreds of billions of dollars. It also excludes operating expenses and the need to eventually produce a profit. There is tremendous uncertainty in the coming years, all dependent upon the ability of Anthropic and OpenAI to register skyrocketing revenues and build durable business models.
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Say goodbye to free cash flow Amazon has said it will lay out $200 billion on capital expenditures this year, up 52% compared to 2025. The company will burn $11 billion in free cash flow in 2026, according to analysts' consensus estimates. Investors have to get used to this new financial reality.
On a positive note, Amazon has historically excelled at choosing where to invest with an eye toward the long term. Additionally, the sizable investments it's making could also benefit the overall business. The online marketplace, logistics network, Prime Video, and advertising segment, for example, are all leveraging its expanded AI capabilities.
AMZN stock is moving. See the chart and price action here. AMZN – Overweight, $335 Price TargetIn a new note, the firm reiterates its Overweight rating on Amazon and nudges its price target up to $335 from $330, based on 25.5 times 2028 earnings, as it extends its valuation horizon and edges estimates above consensus into 2028.
At the center of the call is a simple trade‑off: KeyBanc sees near‑term margin pressure as the cost of entrenching AWS as a primary supplier of scarce AI compute.
The analysts raise 2026 and 2027 total net sales by less than 1% but mark AWS meaningfully higher, modeling 31% year‑over‑year growth in both years, versus Street expectations closer to the low‑30s.
The analysts also lift 2026 and 2027 operating income by 4% and 8%, respectively, and introduce 2028 projections that put revenue at about $1.08 trillion and operating income at roughly $178.6 billion.
Capex is where the call diverges sharply from consensus. Management has already signaled that faster AWS growth requires more up‑front spending, and KeyBanc leans into that message, penciling in 2027 and 2028 capital expenditures of $331 billion and $356 billion.
That compares with Street estimates of $235 billion and $241 billion, implying KeyBanc is underwriting a materially steeper investment curve as Amazon races to build data centers and secure power for AI workloads.
AWS Backlog SwellsThe firm ties that capex stance directly to a swelling AWS backlog and a series of long‑dated power and capacity deals. It expects AWS backlog to reach around $485 billion, driven largely by a $100 billion, 10‑year agreement signed with Anthropic in April.
Additional commitments from OpenAI and Anthropic — 2GW of power over eight years and 5GW over 10 years, respectively — are framed as structural demand signals, reinforcing the view that incremental compute remains both scarce and valuable.
The TakeawayIn that context, Amazon’s spend‑now posture becomes a rational strategy to deepen an AI infrastructure moat, even if it compresses near‑term margin upside.
KeyBanc’s message to investors: tolerate the capex surge and focus on what the firm sees as a durable, high‑growth AWS earnings stream stretching toward the end of the decade.
Photo: PJ McDonnell / Shutterstock
This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
Market News and Data brought to you by Benzinga APIs
Amazon testuje software pro řízení směn ve skladech, ale část manažerů jeho doporučení obchází a žádá vypnutí automatických kontrol. Firma přesto plánuje širší nasazení napříč desítkami severoamerických fulfillment a sort center a do roku 2026 tvrdší vynucování.
An Amazon fulfillment center Bloomberg/Getty Images Amazon is testing software to decide where warehouse workers should go. Some managers keep ignoring it.
Internal planning documents show the tech giant intends to expand these labor-management systems across dozens of its North American fulfillment centers and sort centers, where they could save hundreds of millions of dollars a year.
However, some warehouse managers have been overriding the software recommendations, asking engineers to disable automated features, and finding other ways around the systems, according to internal Slack conversations and the documents from earlier this year.
The pushback has been enough for Amazon to conclude that software recommendations alone aren't enough to get the new technology working as designed.
"Providing managers with optimized recommendations is necessary but insufficient," Amazon said in one of the documents. "Without system-enforced guardrails, manual overrides and habits erode even the best science."
The conflict highlights a broader challenge in automating warehouse management: software can make decisions, but people still have to follow the guidance. The documents and internal communications reviewed by Business Insider suggest getting managers to trust the software, and ultimately defer to its decisions, is proving more difficult than Amazon expected.
Competing philosophiesAmazon uses a growing mix of machine learning, computer vision, and other AI tools that increasingly guide staffing decisions traditionally made by managers.
Initially, those systems functioned as advisory tools. A program called DOPLERS calculates staffing plans, Full Facility Load Balancing recommends labor moves, and Right Link Station automatically tracks and captures check-in data for support staff.
But the internal documents reviewed by Business Insider show Amazon came to see manager discretion as an obstacle.
"Algorithm accuracy cannot be meaningfully measured without enforcement," one of the documents stated.
The documents reveal two competing philosophies of warehouse management. Some managers believe warehouses are still too dynamic for algorithms to understand every situation. Amazon, however, saw that too much human judgment prevented those algorithms from working as intended.
As a result, Amazon's strategy evolved to broader tracking of overrides and stricter enforcement planned over time.
"Hard enforcement is the end goal for 2026," one planning document stated.
"Iterate on the logic"
Amazon CEO Andy Jassy Bloomberg/Getty Images In an email ahead of publication, an Amazon spokesperson called this story's premise "wrong," saying the company is only piloting the technology at a small number of US facilities to help managers adjust staffing as package volumes change.
Managers still make staffing decisions, the spokesperson added, while the software system provides "better information" and is being refined based on testing and employee feedback before any broader rollout.
"As with all new systems, we continuously iterate on the logic — it takes time, testing, and iteration to get there — which is why it's inappropriate to draw broad conclusions during initial testing phases," the spokesperson said. "We always want to learn what's working for our employees, and what isn't, so we can make adjustments to get things right. That's what pilots are all about."
The spokesperson said the quotes and sentiments cited in the story came from an "early-stage planning document" that captured anecdotal observations during a pilot and "don't reflect how the system operates today." The issues were "not a widespread or ongoing concern," the spokesperson said, adding that the tools are intended to help managers make more consistent staffing decisions, not replace their judgment.
An Amazon spokesperson previously told Business Insider that broader expansion plans remain subject to change and that projected savings estimates are hypothetical because the systems are still being tested.
"Please turn if off"Still, the documents and internal communications reviewed by Business Insider suggest a deeper disagreement over who should make staffing decisions inside Amazon's warehouses.
Some managers often wanted to keep more workers assigned to their areas to maintain productivity or because they believed operations required more staffing than the software recommended, according to Slack messages from inside Amazon that were obtained by Business Insider.
Several managers overstaffed warehouse support roles and "hid hours through manual time edits," as some sites found "loopholes," Amazon said in the official internal documents.
The Amazon spokesperson told Business Insider that managers make staffing decisions based on what the company has learned about shopping patterns over the years, but "there will always be variations."
Internal Amazon Slack conversations from earlier this year show some managers at the company repeatedly asking to disable some of the automated staffing controls, or give warehouse leaders authority to do it themselves.
"Please turn it off now and I will explain," one warehouse manager wrote shortly after Amazon's enforcement effort launched at an early test site.
Minutes later, an Amazon product manager replied, "We will disable enforcement for now."
Some managers argued the software often lacked the context they had on the warehouse floor, noting that the system overreacted to a brief slowdown in package volume, recommending staffing cuts that didn't reflect real-time conditions.
Other managers complained the system pulled workers away from urgent areas, prevented them from reassigning idle employees, or left workers temporarily locked out of new assignments while different systems synchronized.
One manager said automated staffing changes caused packages to repeatedly circulate through the warehouse instead of being processed the first time, prompting a request to "disable the system until it gets fixed."
Another manager questioned whether the software could account for differences between workers. "Does it understand 6 foot three Henry that weighs 250 pounds is way better at chasing than 67-year old Henrietta that weighs under 100 pounds and doesn't reach 5 foot?" this person wrote in Amazon's internal Slack.
The Amazon spokesperson told Business Insider that the Slack channel included a "small handful of managers" and the comments "don't reflect the current state of the technology, since they're from a channel that was intended to provide constructive feedback on this initial pilot."
Amazon wants to double downThe conflict reveals something larger than a disagreement over warehouse software.
Historically, supervisors balanced labor using experience and local knowledge. Amazon wants software to make more of these decisions.
The official internal documents show Amazon interpreted manager workarounds less as evidence that automation had limits than as proof that recommendations alone wouldn't change behavior.
Internal Amazon roadmaps call for progressively tighter controls, including limits on how far managers can deviate from the algorithm. Amazon's own "Success Metrics" for 2026 mention a "reduction in manual staffing interventions by managers."
"Enforcement is our highest-leverage mechanism and we're doubling down," Amazon stated in one of the documents.
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Eugene is Business Insider’s Chief Tech Correspondent, where he leads coverage of Amazon. His reporting spans the company’s retail operations, AWS, Alexa, and its secretive internal work culture.Previously, he worked at CNBC, Fortune Magazine Korea, and Japan's Yomiuri Shimbun. He holds degrees from NYU and Columbia University’s Graduate School of Journalism.In 2022, Eugene broke a story uncovering Amazon’s practice of deceptively enrolling customers in Prime and deliberately making cancellation difficult. A year later, the Federal Trade Commission sued the company, citing his reporting. That case culminated in a record $2.5 billion settlement in 2025.His reporting has earned multiple honors, including the SF Press Club’s Bay Area Journalism Award and SPJ NorCal’s Excellence in Journalism Award.Eugene lives in the Bay Area. Contact him via email at [email protected], or Signal, Telegram, or WhatsApp at 650-942-3061. Use a personal email address, a nonwork WiFi network, and a nonwork device; here's our guide to sharing information securely. ExpertiseAmazon, Jeff Bezos, Andy Jassy, e-commerce, and cloud computing.Popular ArticlesAmazon:Internal Amazon emails give an exclusive look at how CEO Andy Jassy has started to run the company, with obsessive attention to the retail business and what some employees feel is micromanagingAndy Jassy will be the next CEO of Amazon. Insiders dish on what it's like to work for Jeff Bezos' successor, who built AWS into a $40 billion business.Internal documents show Amazon has for years knowingly tricked people into signing up for Prime subscriptions. 'We have been deliberately confusing,' former employee says.Inside Amazon's flailing brick-and-mortar ambitions: missed projections, pressure to cut costs, and a war with Whole FoodsInside Amazon's complex employee-review system, where workers feel left in the dark and managers expect to give 5% of reports bad reviewsAfter 28 years, 'Day 2' finally arrives at AmazonAWS, Alexa, healthcare:Inside Amazon's struggle to break into the lucrative market for SaaS business applications, including an internal pitch to buy $38 billion HubSpotInside Amazon's struggle to crack Nvidia's AI-chip dominanceAmazon's AI data center dream runs into the reality of 'zombie' facilities, higher costs, and labor shortagesAmazon is gutting its voice assistant, Alexa. Employees describe a division in crisis and huge losses on 'a wasted opportunity.'Amazon is working on a new 'Remarkable Alexa,' but internal politics and technical issues plague the projectAmazon projected huge losses from its healthcare business in 2024, but strong sales growth, internal document reveals
AWS Amazonu v 1. čtvrtletí 2026 meziročně vzrostly tržby o 28 % na 37,6 miliardy USD, nejrychleji za 15 čtvrtletí. Firma zároveň čeká ve 2. čtvrtletí tržby 194 až 199 miliard USD.
Key Takeaways Amazon's AWS revenues rose 28% in Q1 2026, its fastest growth in 15 quarters, driven by AI demand.AMZN posted record Prime Day sales and guided Q2 net sales to $194-$199B with up to 19% growth.Amazon cites AI, advertising, grocery and newer businesses as growth drivers despite higher AI spending. Amazon (AMZN - Free Report) appears overvalued at a forward 12-month price/earnings ratio of 25.98X, higher than the Zacks Internet – Commerce industry's 21.95X. Amazon has a Value Score of D.
Yet a premium multiple does not tell the whole story on its own. Three developing catalysts, spanning cloud demand, consumer resilience and a broadening mix of revenue streams, suggest Amazon's near-term setup still favors buyers willing to look past the headline ratio, even as elevated infrastructure spending and fresh regulatory noise keep the stock's path from being entirely smooth in the months ahead.
AMZN’s P/E Ratio Depicts Stretched Valuation
Image Source: Zacks Investment Research
AWS Reacceleration Anchors the Bull CaseAmazon's cloud engine is firing again. AWS revenues grew 28% year over year in the first quarter of 2026 to $37.6 billion, its fastest growth pace in 15 quarters, as enterprises leaned harder into generative AI workloads running on Amazon's infrastructure. Bedrock customer spend climbed 170% quarter over quarter, and Amazon's custom silicon business, spanning Trainium and Graviton chips, crossed a $20 billion annual revenue run rate while growing at triple-digit percentages, with more than $225 billion in Trainium-related revenue commitments already on the books.
Management has continued expanding AWS' AI stack through the summer, adding OpenAI's latest models and a Codex coding agent to Bedrock, launching Bedrock Managed Agents, and rolling out AgentCore tools for enterprise-grade AI agents at AWS Summits in New York and Washington. AWS also confirmed a 20% July price increase on GPU-linked EC2 Capacity Blocks, a signal that AI compute demand remains tight enough to support pricing power even as the company races to add capacity. A swelling AWS backlog, boosted further by large multi-gigawatt compute commitments from external AI partners such as OpenAI and Anthropic, underscores demand visibility well beyond the current quarter and supports the case for sustained double-digit cloud growth into 2027.
Record Prime Day and Encouraging GuidanceAmazon's June 23-26 Prime Day event generated a record $26.4 billion in U.S. online sales, roughly 9% higher than a year earlier, reinforcing the strength of its 180-million-plus Prime membership base heading into the back half of 2026. That reading follows a first-quarter beat in which net sales rose 17% to $181.5 billion, advertising revenues grew 24% to $17.2 billion, and operating income reached a record 13.1% margin.
For the second quarter, management guided net sales toward $194 billion to $199 billion, representing growth of 16% to 19%, and operating income of $20 billion to $24 billion, with guidance explicitly assuming Prime Day activity landed inside the quarter. Retail unit growth of 15%, the fastest pace since the pandemic era, and a regionalized fulfillment network that has already supported more than a billion same-day or overnight deliveries this year, point to an e-commerce engine that keeps gaining efficiency alongside scale.
The Zacks Consensus Estimate for AMZN's 2026 earnings is pegged at $8.86 per share, indicating a 23.57% increase from the figure reported in the year-ago quarter.
AMZN’s Diversified Growth Engines Widen the MoatBeyond cloud and retail, Amazon's advertising business has grown into a roughly $70 billion trailing 12-month revenue stream, while the grocery business has become one of the largest food retailers in the country, with more than $150 billion of 2025 gross sales. Newer bets are also maturing: Amazon LEO's commercial satellite service is on track for a third-quarter launch, and Amazon Quick, an AI work assistant unveiled this summer with a new desktop app, is expanding across enterprise integrations alongside agentic hiring and supply-chain tools introduced at recent AWS events.
Elevated capital expenditures, guided toward roughly $200 billion for 2026, have compressed trailing free cash flow and drawn investor scrutiny, and a pending FTC inquiry into advertising disclosures adds a layer of regulatory overhang worth monitoring. Even so, management frames the AI infrastructure buildout as demand-backed rather than speculative, pointing to signed compute commitments as evidence that today's spending is underwriting tomorrow's revenues rather than sitting idle.
Taken together, a reaccelerating cloud franchise, a resilient consumer signal from Prime Day, and expanding, less cyclical revenue streams give investors reason to look past the premium multiple, provided capital spending discipline holds, and overall cloud growth continues to comfortably outrun the rising cost of building it all out over the coming quarters.
Share Price Movement and the Cloud Competitive LandscapeAmazon shares have jumped 5.2% in the past six-month period against the industry and the Zacks Retail-Wholesale sector's decline of 2.8% and 4.4%, respectively. AMZN shares have been notably volatile through 2026, retreating sharply from a 52-week high near $278 in late May to trade closer to the mid-$240s by mid-July, even after a record Prime Day and a well-received first-quarter earnings report, as investors continue to digest roughly $200 billion in planned annual capital spending on AI infrastructure.
AMZN’s 6-Month Price Performance
Image Source: Zacks Investment Research
AWS still leads global cloud infrastructure, but Microsoft's (MSFT - Free Report) Azure remains its closest rival, layering OpenAI's models and Copilot across its enterprise software stack to defend its share. Alphabet (GOOGL - Free Report) -owned Google Cloud has kept gaining ground through Gemini-linked AI tooling and custom TPU chips, while Oracle (ORCL - Free Report) has emerged as a faster-growing, AI-training-focused challenger through large data-center contracts. Microsoft and Google both continue investing heavily in proprietary silicon, much like Amazon, and Oracle's expanding cloud infrastructure backlog shows how contested the AI compute race between Amazon, Microsoft, Google and Oracle has become heading into the second half of 2026.
Bottom LineAmazon's blend of reaccelerating cloud growth, a record Prime Day, and expanding advertising and grocery revenues makes a reasonable case for near-term buyers, even at a premium multiple. Heavy AI capital spending and regulatory scrutiny remain watchpoints, but execution across AWS, retail and newer bets keeps the growth story intact. Amazon currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Amazon Leo uzavřel dohodu s Herotel o spuštění satelitní širokopásmové služby pro venkovské oblasti Jižní Afriky. Komerční start pro domácnosti je plánován na rok 2027.
Amazon Leo is displayed during the Delivering the Future EMEA 2026 event at Amazon's LCY3 fulfilment centre in Dartford, Britain, June 4, 2026. REUTERS/Toby Shepheard/File Photo Purchase Licensing Rights, opens new tab
JOHANNESBURG, July 15 (Reuters) - Amazon's (AMZN.O), opens new tab low-earth orbit satellite internet venture Amazon Leo has signed an agreement with South Africa's Herotel to launch a new broadband service aimed at connecting underserved rural communities, it said on Wednesday.
Under the agreement, Herotel, South Africa's largest fixed internet service provider, will use Amazon Leo's satellite technology to offer a new service called evry, which is expected to launch commercially in 2027 for residential customers.
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The deal comes as satellite internet providers race to expand in Africa. SpaceX's Starlink is also seeking to enter the South African market, but is awaiting proposed changes to licensing rules that could allow foreign satellite operators to meet local ownership and empowerment requirements through alternatives to equity stakes.
Amazon Leo and Herotel said their partnership would help address a longstanding connectivity gap in South Africa, where millions of people living on farms, in small towns and rural communities remain beyond the reach of reliable internet services because conventional fibre and wireless networks are often uneconomical to deploy.
Financial details of the agreement were not disclosed.
"This collaboration is about breaking down barriers and unlocking opportunity for millions of people who don't yet have reliable access for work, education, or the services they depend on," David Zapolsky, Amazon's chief global affairs and legal officer, said in a statement.
Herotel, owned by Maziv, serves more than 350,000 customers across over 550 towns through fibre and fixed wireless networks and operates 120 offices nationwide. The company said that footprint would allow it to provide installation, customer service and field operations for the satellite service from launch.
Earlier this year, Amazon Leo signed an agreement with Vodafone (VOD.L), opens new tab to link Vodafone's network to base stations in hard-to-reach locations in Africa, through its South Africa subsidiary Vodacom (VODJ.J), opens new tab.
Reporting by Nqobile Dludla; Editing by Sanjeev Miglani
Our Standards: The Thomson Reuters Trust Principles., opens new tab
Nqobile is a Johannesburg-based reporter covering the South African retail, telecom and tech sectors. She has been a journalists for about 10 years. She joined Reuters in 2015 and has covered a variety of beats ranging from pharma, health to property and banking.
Andy Jassy uvedl, že prodej AI čipů by se pro Amazon mohl stát byznysem za 50 miliard USD ročně. Zájem o čipy Trainium je podle něj tak silný, že firma může v budoucnu prodávat i celé racky třetím stranám.
Amazon (AMZN +3.44%) is a company that's done a terrific job of expanding its business over the years. Not only is it an e-commerce giant, but many companies rely on its cloud business, Amazon Web Services (AWS), and that has become a major source of profit for the entire company. Amazon has also gotten involved in robotaxis, grocery stores, and healthcare.
One of its most promising new opportunities, however, could involve selling artificial intelligence (AI) chips.
Image source: Getty Images.
Why selling chips could be a huge part of Amazon's business in the future Amazon's top AI chip, Trainium, was built with a heavy focus on efficiency and scale. It's effectively built by a company that needs to scale AI efficiently, making it ideal for tech companies looking to reduce costs and improve the profitability of their AI ventures.
CEO Andy Jassy stated in the company's letter to shareholders that "there's so much demand for our chips that it's quite possible we'll sell racks of them to third parties in the future." Jassy estimates that the annual run rate for a theoretical chip business could be around $50 billion. That total includes the revenue that the stand-alone business would generate from AWS, but it's nonetheless a positive sign of the type of growth that Amazon is seeing from this area of its operations.
Last year, Amazon reported $717 billion in revenue. If the company generated an extra $50 billion in cash, that would represent growth of 7%. But with a large chunk of that likely related to AWS, the true growth rate would likely be far more modest. However, if the company prioritized that area of its operations, it could become a major growth catalyst in the future.
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Amazon's stock looks undervalued It's a bit surprising that Amazon's stock isn't doing much better given the opportunities in AI. In just the past 12 months, it's risen by around 10% -- far below the S&P 500's 20% gain over that stretch. It's lagged the market, despite the business continuing to grow and expand.
For investors, now may be an ideal time to buy the stock, as it's trading at a price-to-earnings multiple of around 30, which is extremely low when compared to the average stock in the Technology Select Sector SDPR ETF, which trades at a multiple of 38.
Amazon is a beast in the tech sector, and it can be a fantastic stock to just buy and hold for the long term, as it continually reminds investors that it isn't running out of growth opportunities anytime soon.
Amazon oznámil, že v příštích letech investuje nejméně 10 miliard EUR do modernizace evropské sítě fulfillment center pomocí robotů. To může urychlit automatizační závod a podpořit i Symbotic.
Amazon (AMZN +0.18%) recently announced that it would spend at least €10 billion ($11.4 billion) to modernize its European fulfillment network with robots over the next few years. These robots include Proteus, its fully autonomous warehouse robot; STARK, which picks up heavy bins from conveyor belts and stacks them into carts; and Vulcan, its first tactile-sensing robot that can handle a wide variety of packaging shapes and materials with extreme precision.
Will Amazon's robotics expansion create headwinds for Symbotic (SYM +2.90%), or could it accelerate the automation arms race and drive its stock even higher?
Image source: Getty Images.
What does Symbotic do? Symbotic develops fully autonomous warehouse robots that process pallets and cases. It claims a $50 million investment in just one of its modules (which includes its robots and software) can generate $250 million in savings over 25 years.
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Walmart (WMT 0.94%) is Symbotic's largest customer and one of its top investors. Symbotic generated 85% of its revenue from Walmart in fiscal 2025 (which ended last September), and it holds a contract to automate all of its U.S. regional distribution centers by 2034. Symbotic also acquired Walmart's own robotics division in early 2025, and the two companies are co-developing automated micro-fulfillment systems for individual stores.
Symbotic's other smaller customers include Target, Albertsons, C&S Wholesale, and GreenBox -- a warehouse-as-a-service joint venture it formed with its other major investor, SoftBank.
Why Amazon's move could be great news for Symbotic Amazon's new warehouse robots might initially seem like a threat to Symbotic, since the e-commerce giant could eventually sell its robots to third-party customers to offset its own spending. However, most of Symbotic's revenue still comes from Amazon's top competitor, Walmart, which will likely ramp up its own robotics spending in response to Amazon's accelerated investments.
That automation "arms race" could also drive other retail giants to sign more deals with Symbotic and its industry peers. According to Fortune Business Insights, the warehouse automation market could expand at a 16.1% CAGR from 2026 to 2034 as more of those tailwinds kick in.
From fiscal 2025 to fiscal 2028, analysts expect Symbotic's revenue and adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) to grow at CAGRs of 26% and 73%, respectively.
With an enterprise value of $3.2 billion, it still looks undervalued at one times this year's sales and 10 times its adjusted EBITDA. Therefore, this underappreciated robotics stock could still be a great long-term play on the booming warehouse automation market.
Leo Sun has positions in Amazon. The Motley Fool has positions in and recommends Amazon, Symbotic, Target, and Walmart. The Motley Fool has a disclosure policy.
Jefferies vidí Amazon před výsledky za 2. čtvrtletí dobře pozicovaný díky silnému Prime Day a zrychlujícímu růstu AWS. Očekává růst tržeb AWS kolem 32 %.
Amazon.com Inc (NASDAQ:AMZN) is well-positioned heading into its second-quarter earnings report, according to Jefferies, which reiterated the e-commerce and cloud computing giant as a top pick, citing resilient consumer spending during Prime Day, accelerating Amazon Web Services (AWS) growth and what it views as a discounted valuation.
Jefferies wrote that its proprietary survey of 685 consumers indicated that Prime members continued to increase spending despite inflationary pressures. Among shoppers who participated in Prime Day this year and last year, 54% reported spending more than 10% more year over year, while Amazon remained the preferred shopping destination for many consumers.
Jefferies wrote that its survey indicated Prime members increased their spending during this year's Prime Day, with 54% of returning participants reporting they spent more than 10% more than a year earlier. The analysts also highlighted that higher prices have not discouraged shoppers, noting that 25% of respondents said they use Amazon more to seek value amid inflation.
Beyond retail, Jefferies highlighted AWS as a key driver heading into the quarter. The firm expects AWS backlog growth to continue accelerating from the 93% year-over-year increase reported in the first quarter and approach $500 billion, supporting further revenue growth.
Jefferies expects AWS revenue growth of about 32% in the second quarter, while noting investor expectations are for growth of more than 33%, compared with 28% growth in the first quarter.
The analysts also highlighted several indicators supporting AWS demand, including Anthropic's expanded long-term cloud commitment, recent EC2 price increases and growing demand for AI inferencing workloads.
On valuation, Jefferies wrote that Amazon trades at approximately 12 times next-12-month enterprise value to EBITDA, below Alphabet at roughly 17 times and Walmart at about 19 times, as well as below Amazon's own 10-year average multiple.
Shares traded hands at $247 on Tuesday afternoon, up about 7% so far this year.
Jefferies highlighted that Amazon shares have fallen about 7% since first quarter results, which it views as creating a more attractive entry point. The analysts maintained that improving AWS fundamentals and resilient retail performance support a favorable risk-reward profile.
Looking ahead to the earnings release, Jefferies noted that investors will be watching capital expenditure guidance and free cash flow, signs of continued AWS demand, and the impact of Prime Day shifting into the second quarter this year, which could create more challenging retail comparisons in the third quarter.
Amazon plánuje v roce 2026 kapitálové výdaje kolem 200 miliard USD, hlavně do AI infrastruktury a AWS. Jde o dosud bezprecedentní sázku na dlouhodobý růst.
Amazon’s chief executive put a number on the AI arms race, and it reframes the entire investment thesis for long-term holders.
The Number $200 billion.
That’s what Amazon (NASDAQ:AMZN | AMZN Price Prediction) plans to spend on capital expenditures across the company in 2026, aimed primarily at AI infrastructure, custom chips, robotics, and low-earth-orbit satellite buildout. CEO Andy Jassy disclosed the figure on the Q4 2025 earnings call on February 5, 2026, telling investors: “We expect to invest about $200 billion in capital expenditures across Amazon.com, Inc., but predominantly in AWS, because we have very high demand.” This figure is forward capital expenditure guidance for 2026.
What It Means The scale of this outlay is without recent precedent inside Amazon itself. Full-year 2025 capex already reached $131.8 billion, up from $83.0 billion in 2024 and $16.9 billion in 2019. The 2026 plan pushes that trajectory higher, funding the physical layer of a business that is monetizing capacity as fast as it can install it.
The demand signal is real. AWS revenue reached $37.59 billion in Q1 2026, up 28% YoY, its fastest growth in 15 quarters, at a 37.7% operating margin. Amazon’s custom chip business, spanning Graviton, Trainium, and Nitro, is now running at a $20 billion-plus annualized run rate with triple-digit YoY growth. Committed customer demand includes roughly 2 GW of Trainium capacity for OpenAI starting 2027, up to 5 GW of Trainium chips for Anthropic, and 1 million-plus NVIDIA GPUs to be deployed starting 2026.
Market Reaction Shares closed at $197.75 on February 5, 2026, the day the $200 billion figure was announced. By the April 29, 2026 Q1 filing, the stock was at $259.67. As of July 1, 2026, the price was $241.70, with a year-to-date gain of 4.71% and a one-year gain of 9.63%. The one-month change stands at -7.49%, reflecting recent hyperscaler capex debate, and shares traded at $244.11 on July 2, 2026.
Bull Case The case rests on unit economics that are already working at scale. Q1 2026 EPS came in at $2.78 versus a $1.73 estimate, a 60.69% beat and the fifth consecutive EPS beat. Revenue was $181.52 billion, up 16.61% YoY, with operating income of $23.85 billion, up 29.6% YoY. Advertising is running at a $70 billion-plus trailing 12-month rate, growing 24% YoY.
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Custom silicon is the lever that turns capex into durable margin. Trainium 2 delivers 30-40% better price performance than comparable GPUs, and Trainium 3 offers up to 40% better price performance than Trainium 2, with nearly all supply expected to be committed by mid-2026. Graviton is used by over 90% of AWS’s top 1,000 customers. CFO Brian Olsavsky framed the operating leverage bluntly: “When you are growing 24% year over year with an annualized revenue run rate of $142 billion, you are growing a lot. And what we are continuing to see is as fast as we install this capacity, this AI capacity, we are monetizing it.”
The balance sheet can carry the load. Operating cash flow reached $139.5 billion in 2025, up 20.4% YoY, and net income hit $77.7 billion. Analyst sentiment is heavily positive, with 15 Strong Buy and 47 Buy ratings versus 4 Hold and zero Sell ratings, and a consensus target of $312.99.
Bottom Line For long-term holders, the $200 billion figure is the price of admission to a business Amazon believes will reshape its economic profile. Free cash flow will be compressed near-term, with TTM FCF at $1.2 billion and long-term debt at $119.1 billion, and management has offered no explicit ROI timeline.
The forward catalyst is management’s own guide: Q2 2026 net sales of $194.0 billion to $199.0 billion (16% to 19% YoY growth) and operating income of $20.0 billion to $24.0 billion. If AWS growth holds near the 28% rate and chip revenue keeps compounding, the $200 billion becomes an investment in scarce infrastructure that competitors cannot replicate quickly. Jassy’s own framing sets the bar: “anticipate strong long-term return on invested capital.” The number is the thesis.
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Amazon spouští Amazon Supply Chain Services, čtvrté podnikání vedle e-commerce, AWS a reklamy. Využije vlastní logistickou síť i pro externí zákazníky.
SummaryAmazon is launching Amazon Supply Chain Services, leveraging its logistics infrastructure for external customers beyond its core e-commerce, AWS, and advertising businesses.ASCS targets residential parcel delivery, offering lower rates and simpler pricing to attract third-party volume, improving network utilization and operational efficiency.Base and strong case scenarios suggest ASCS could contribute 2–5% of annualized operating income, with the primary benefit being cost savings in Amazon’s retail logistics.I rate AMZN a Buy, as ASCS enhances logistics economics and offers upside potential beyond AWS and AI, with further value possible from freight and international expansion. hapabapa/iStock Editorial via Getty Images
Amazon (AMZN) traditionally has three businesses: e-commerce, Amazon Web Services, and advertising. Soon, a fourth business is going to be added to this. This is ASCS, or Amazon Supply Chain Services.
In May, Amazon opened
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Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.
Amazon vydá dluhopisy za 25 miliard USD na financování rozšíření datových center. Firma chce letos investovat kolem 200 miliard USD do kapitálových výdajů.
Amazon (AMZN 0.69%) is reported to have made a shocking decision in recent days. According to CNBC, it is issuing $25 billion in debt to fund its data center build-out. While it doesn't plan to issue any more debt beyond that in 2026, it's a big deal because Amazon's long-term debt has been soaring in the past few years.
Building data centers isn't cheap, and the cash has to come from somewhere, but is this the right move, or should it scare investors?
Image source: Getty Images.
The payoff could be immense In recent years, Amazon's debt load has skyrocketed from the company's historical levels.
AMZN Total Long Term Debt (Quarterly), data by YCharts.
The latest $25 billion sale of debt adds to this total, but Amazon has the cash flow to fund the repayment. The reality is that it's vital for the company to grab as much cloud infrastructure market share as possible in these early days of the AI build-out; it will be more difficult to win clients away from other cloud providers once everyone has their preferred vendor.
The company is currently leading the way among AI hyperscalers in data center construction plans, and it expects to lay out around $200 billion in capital expenditures this year. Over the past 12 months, Amazon generated just shy of $150 billion in cash from operations, so the gap between funds coming in and cash flowing out had to be closed somehow.
AMZN Cash from Operations (TTM), data by YCharts; TTM = trailing 12 months.
As a result, investors should not feel too blindsided by this debt issuance. But is it worth it?
CEO Andy Jassy said in his shareholder letter that the nature of a cloud computing business requires increased capital input when it's growing rapidly. Data centers aren't cheap to bring online, but they do have great payoffs over long time frames. Jassy also mentioned that a significant amount of the new computing capacity that $200 billion will buy is already under contract to customers, so it isn't just taking a leap of faith when building these data centers.
Once the construction is over and the company is benefiting from a much larger cloud computing footprint, its gains in revenue and cash flow will be immense, and should dwarf any concerns about its rising debt load. Current market conditions and demands dictate that management build more data centers, and that's exactly what it's doing.
With Amazon Web Services being a major part of the cloud computing landscape and an important part of the company's overall business, now is a perfect time to buy the stock, as Amazon's growth over the next few years could be immense.
$2.6 trillion. That is what Amazon (NASDAQ:AMZN | AMZN Price Prediction) is worth as of July 2, 2026, sitting on 10.76 billion shares at a closing price of $242.67. The figure is a market cap, not a reported financial.
What makes this the number to watch is what is happening underneath the hood. Indeed, the parts of Amazon growing fastest are now the ones with the highest margins, and the empire built on retail is being repriced as an artificial intelligence infrastructure business.
What It Means Behind Amazon’s $2.6 trillion valuation is a Q1 2026 report that changed the growth math. Revenue landed at $181.52 billion, up 16.61% year over year. Earnings per share came in at $2.78 against a $1.653 estimate, a 68.18% beat and the fifth consecutive EPS beat. Investors should note that net income of $30.25 billion included $16.8 billion in pre-tax gains from Anthropic holdings, a non-recurring item. The cleaner read is operating income of $23.85 billion, up 29.6% year over year, with the corporate operating margin at 13.1%.
On the horizon, I think the real repricing catalyst is AWS. Cloud revenue reached $37.59 billion, growing 28%, the fastest pace in 15 quarters, at an operating margin of 37.7%. Amazon’s chips business (Graviton, Trainium, Nitro) crossed a $20 billion annual run rate at triple-digit year-over-year growth. Advertising services generated $17.24 billion in the quarter, up 24%, and now runs at a trailing rate above $70 billion. Unit growth in stores hit 15%, the highest reading since the end of COVID lockdowns.
Market Reaction Shares of AMZN stock are up 6.9% over the past week and 5.13% year to date, but down 5.4% over the past month. The stock closed at $259.67 the day the Q1 earnings report was filed on April 29, 2026, ran to $271.17 one week later, then cooled to today’s $242.67. Over one year the stock is up 10.34%, and over ten years it is up 568.81%.
Bull Case The bull case is that Amazon is being paid like a mature retailer while operating like a growth infrastructure company. At 32 trailing earnings and 31 forward earnings, the multiple sits alongside quarterly earnings growth of 74.8% and return on equity of 24.3%. Operating cash flow rose 52.99% year over year to $26.03 billion. International operating income grew 40% year over year, and North America’s operating margin expanded to 7.9% from 6.3%.
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The company’s AI backlog is the piece long-term holders should focus on. AWS has locked in roughly 2 gigawatts of Trainium capacity for OpenAI through 2027 and up to 5 gigawatts for Anthropic, with Meta also on the customer list. Amazon Bedrock processed more tokens in Q1 than in all prior years combined, and customer spend on Bedrock grew 170% quarter over quarter.
CEO Andy Jassy framed it plainly: “We’re in the middle of some of the biggest inflections of our lifetime, we’re well positioned to lead, and I’m very optimistic about what’s ahead for our customers and Amazon.”
Analyst positioning matches the setup. Of the analysts covering the name, 15 rate it Strong Buy, 47 Buy, 4 Hold, and none Sell, with a consensus target of $312.99.
Bottom Line The $2.61 trillion price tag is only heavy if AWS decelerates – right now it is doing the opposite. Amazon guided Q2 2026 revenue to $194 billion to $199 billion, or 16% to 19% growth, with operating income of $20 billion to $24 billion against a year-ago figure of $19.2 billion.
That guidance assumes Prime Day falls in Q2 2026. The near-term catalysts on the calendar (Prime Day, the Q2 earnings report, and the start of a 1 million-plus NVIDIA GPU deployment in 2026) will test whether the AI infrastructure narrative can pull the multiple higher. For retirement-focused holders, the question is whether the second-largest company in America is still compounding like a growth company at a $2.61 trillion market cap. This quarter says yes.
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Amazon ve 1. čtvrtletí zvýšil tržby AWS o 28 % na 37,6 miliardy USD a celkové tržby o 17 % na 181,5 miliardy USD. Silné investice do AI ale stlačily volný peněžní tok na zhruba 1,2 miliardy USD za posledních 12 měsíců.
In a year when the artificial intelligence (AI) trade minted fortunes across chipmakers and power suppliers, one of the companies best positioned to profit from AI at scale has been left behind. Amazon (AMZN 0.73%) has been one of the megacap laggards of 2026, up only modestly while the AI names raced higher around it.
What makes that odd is that Amazon's business is arguably in its best shape in years. The stock even drew fresh attention recently when a well-known hedge fund manager was reported to have trimmed his position, adding to a sense that the market has cooled on it.
So, with the stock sitting about 12% below its 52-week high, is Amazon a bargain hiding in plain sight? Or is the market right to hesitate?
Image source: Getty Images.
The business is quietly setting records The place to look first is the cloud. Amazon Web Services, the company's most important profit engine, just reaccelerated. AWS revenue rose 28% year over year to $37.6 billion in the first quarter of 2026. That was its fastest growth in 15 quarters, and it puts the business at about a $150 billion annual pace.
A good chunk of that reacceleration is AI itself. Companies increasingly train and run their models where their data already sits, and for many of them that means AWS.
The growth is also enormously profitable. AWS generated $14.2 billion in operating income at a 37.7% margin, which is why it drives most of Amazon's profits even though it is a fraction of total revenue.
The rest of the company pulled its weight, too. Total revenue rose 17% to $181.5 billion, and operating income jumped to $23.9 billion. That worked out to an operating margin of 13.1%, a record for Amazon and a sign that years of cost discipline in retail are finally showing up.
By segment, North America revenue rose 12% to $104 billion, and the international business grew 19%, both turning a solid profit. Advertising, a high-margin business tucked inside retail, keeps growing at a double-digit clip and quietly pads those margins.
Amazon is even building a substantial AI chip business. Its custom silicon now runs at more than a $20 billion annual revenue pace and is growing at triple-digit rates, as customers hunt for cheaper alternatives to the priciest graphics processing units (GPUs).
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What's holding the stock back So why hasn't the stock followed? The short answer is spending. Amazon poured $44.2 billion into capital projects in the first quarter alone, most of it for AI infrastructure, up from $25 billion a year earlier.
That surge has all but erased the company's free cash flow, which fell to about $1.2 billion over the trailing 12 months, down from nearly $26 billion.
That is the figure that worries investors. A company famous for generating cash is suddenly generating almost none. The bet is that today's spending builds the data centers that power tomorrow's AWS growth. But that payoff takes years, and the timing is never guaranteed.
Still, I think the trade-off looks reasonable. The spending is a choice, not a symptom of a struggling business. AWS is reaccelerating, retail margins are improving, and the chip business gives Amazon a second way to profit from AI.
Amazon has made this kind of bet before, too. It spent heavily to build AWS and its logistics network years ago, and both turned into enormous profit engines once the investment cycle passed.
And the price is fair. At about $244 as of this writing, Amazon trades at roughly 29 times earnings. That isn't the bargain-bin multiple its underperformance might suggest, but it's a reasonable price for a business growing profits at this rate, and a discount to where the stock has often traded in the past.
So is Amazon a bargain? Not a screaming one. But I think it's good value here, and the setup is appealing: a market-leading business performing well on several fronts, temporarily out of favor because it is investing heavily for the future.
Personally, I'd be comfortable buying on this weakness. I'd just go in knowing that the heavy spending, and the pressure it puts on free cash flow, is likely to continue for a while. For patient investors, the laggard may turn out to be the opportunity.
Amazon dokončila prodej dluhopisů za 25 miliard USD a tím financuje plánované výdaje ve výši 200 miliard USD na AI infrastrukturu v roce 2026. Firma zároveň uvedla, že v roce 2026 už další dluh nevydá.
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52-Week Range$196.00▼
$278.56P/E Ratio29.41
Price Target$312.79
Amazon.com, Inc. NASDAQ: AMZN recently finalized an eight-tranche, $25 billion investment-grade corporate bond sale, signaling a highly strategic pivot in capital allocation. Amazon is aggressively shifting toward leveraged financing to underwrite an unprecedented $200 billion mandate for artificial intelligence (AI) infrastructure in 2026.
Fixed-income markets readily absorbed the offering. However, a closer look at softening order books and aggressive executive liquidations exposes early signs of broader market fatigue. Investors now face a classic fundamental tradeoff. Market participants need to weigh immediate balance sheet strain against the long-term margin advantages of scaling proprietary silicon and dominating the next generation of compute cycles.
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Cheap Money, Big ComputeCapital allocation dictates market leadership. Amazon, utilizing the bond market, provides a clear window into how the business plans to fund the escalating artificial intelligence arms race against peers like Microsoft NASDAQ: MSFT. With credit ratings holding strong at AA-, Amazon locked in highly advantageous pricing across maturities ranging from 3 to 40 years. Management also explicitly signaled to underwriters that this transaction concludes all debt issuance for the 2026 calendar year, creating a defined boundary around near-term leverage.
The 40-year tranche demands specific attention from fundamentally driven investors. This specific debt priced at a mere 125 basis points over standard Treasuries. For context, basis points measure the yield spread over a baseline rate.
By securing four decades of capital at just 1.25% above the Treasury yield, Amazon effectively locks in generations of cheap financing while inflation gradually erodes the real value of that debt over time. This dynamic provides a severe cost-of-capital advantage over smaller competitors trying to build competing data center footprints.
The July offering generated $62 billion in peak demand from institutional buyers, proving that the bond market retains liquidity and the willingness to underwrite Amazon Web Services' capacity expansion. That subscription ratio is notably weaker than the $37 billion debt offering Amazon executed in March.
This cooling demand points to slight fatigue in the debt market. Fixed-income investors are becoming more selective and demanding higher yields as the total addressable market for megacap tech debt rapidly expands across the sector.
Silicon Starvation: Amazon Feasts on Proprietary ChipsTo understand the sheer scale of the $200 billion capital expenditure target for 2026, investors should evaluate the immediate impact on free cash flow. Wall Street analysts project that this infrastructure mandate will push Amazon into an estimated $40 billion negative free cash flow deficit annually across 2026 and 2027.
For a traditional retail operation, negative free cash flow of that magnitude would signal extreme operational distress. For an infrastructure provider racing to secure computing dominance, it operates as a structural moat. The cash is not vanishing into operational inefficiencies. Amazon is actively converting capital into hard assets. Capital is earmarked for aggressive data center expansion, scaling proprietary Trainium chip production, and supporting pre-IPO equity stakes in developers.
Investors tracking operating margins need to separate headline earnings from core operational performance to grasp the actual trajectory of Amazon. A significant portion of the Q1 net income beat was distorted by a $16.8 billion pre-tax gain derived from the equity investment in Anthropic. This accounting gain masks the true operational margin run rate of the core business operations.
The long-term margin offset comes from securing the physical layer of cloud computing. By holding major private stakes in developers like Anthropic, Amazon captures both sides of the trade. Amazon provides the necessary compute power while owning a piece of the underlying application. With Taiwan Semiconductor Manufacturing Company's NYSE: TSM 3nm foundry capacity running at full utilization, bringing Trainium production in-house gives Amazon critical pricing leverage and reduces reliance on expensive legacy graphics processing units.
C-Suite Retreat? Amazon's Insider SalesFundamentals ultimately drive valuations, but sentiment dictates near-term price action. Broad sector rotation is actively dampening momentum across the tech space. The major tech conglomerates are currently lagging the broader Nasdaq-100 index, a trend compounded by recent geopolitical risk-off pressures and growing institutional caution about the prolonged investment returns for data center hardware.
Current Price$248.82High Forecast$370.00Average Forecast$312.79Low Forecast$218.00Amazon.com Stock Forecast Details
Against this macroeconomic backdrop, insider trading data introduces minor friction into the bullish structural narrative. Corporate executives routinely sell shares for tax and diversification purposes, but the sheer breadth of recent liquidations warrants investor attention.
Over the trailing 90 days, insider selling totaled $51.6 million. CEO Andy Jassy offloaded over $20 million in equity during the second quarter. Senior Vice President David Zapolsky recently liquidated 18.4% of his position. Douglas Herrington, CEO of Worldwide Amazon Stores, executed back-to-back share distributions in June and July.
These dispositions occur alongside a lack of executive open-market purchases. A put/call ratio of 0.44 shows options traders maintaining heavy bullish conviction ahead of the July 30 earnings report, but the steady selling reflects routine executive profit-taking during a peak capital cycle.
The Waiting Game: Scaling Amazon's InfrastructureThe transition from cash reserves to leveraged financing is a defining characteristic of the modern infrastructure war. Amazon is weaponizing the balance sheet, taking on targeted, low-cost debt to build physical capacity that emerging competitors cannot afford to match.
Investors monitoring Amazon at current pricing levels might view the projected free cash flow deficit as a necessary growing pain rather than a structural flaw. The core fundamental thesis relies on Amazon Web Services successfully monetizing this colossal buildout in the coming years, translating gigawatt-level power contracts into recurring enterprise revenue streams.
Those looking to allocate capital to the cloud sector may consider holding current positions as the second-quarter earnings report approaches, watching closely for updates on revenue acceleration and adjusted operating margins.
Cautious investors may prefer to wait for broader sector rotation to stabilize before taking a new position, using any macro-driven pullback as an opportunity to acquire shares of a dominant infrastructure provider at a more favorable valuation multiple.
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Amazon (AMZN - Free Report) closed at $247.04 in the latest trading session, marking a +1.4% move from the prior day. The stock's change was more than the S&P 500's daily gain of 0.81%. On the other hand, the Dow registered a gain of 0.27%, and the technology-centric Nasdaq increased by 1.3%.
Prior to today's trading, shares of the online retailer had gained 2.36% outpaced the Retail-Wholesale sector's gain of 0.24% and the S&P 500's gain of 1.13%.
Market participants will be closely following the financial results of Amazon in its upcoming release. The company is predicted to post an EPS of $1.82, indicating a 8.33% growth compared to the equivalent quarter last year. At the same time, our most recent consensus estimate is projecting a revenue of $196.9 billion, reflecting a 17.41% rise from the equivalent quarter last year.
For the entire fiscal year, the Zacks Consensus Estimates are projecting earnings of $8.86 per share and a revenue of $826.36 billion, representing changes of +23.57% and +15.26%, respectively, from the prior year.
Investors should also note any recent changes to analyst estimates for Amazon. Such recent modifications usually signify the changing landscape of near-term business trends. As such, positive estimate revisions reflect analyst optimism about the business and profitability.
Our research shows that these estimate changes are directly correlated with near-term stock prices. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.
The Zacks Rank system ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. The Zacks Consensus EPS estimate has moved 0.39% higher within the past month. Amazon is holding a Zacks Rank of #2 (Buy) right now.
In terms of valuation, Amazon is currently trading at a Forward P/E ratio of 27.48. Its industry sports an average Forward P/E of 16.7, so one might conclude that Amazon is trading at a premium comparatively.
Investors should also note that AMZN has a PEG ratio of 1.59 right now. Comparable to the widely accepted P/E ratio, the PEG ratio also accounts for the company's projected earnings growth. As of the close of trade yesterday, the Internet - Commerce industry held an average PEG ratio of 1.04.
The Internet - Commerce industry is part of the Retail-Wholesale sector. This group has a Zacks Industry Rank of 187, putting it in the bottom 24% of all 250+ industries.
The Zacks Industry Rank assesses the vigor of our specific industry groups by computing the average Zacks Rank of the individual stocks incorporated in the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.
Don't forget to use Zacks.com to keep track of all these stock-moving metrics, and others, in the upcoming trading sessions.
BNP Paribas očekává, že Amazon ve 2. čtvrtletí překoná očekávání díky zrychlení růstu AWS a že jeho ocenění představuje atraktivní vstupní bod. Odhad růstu tržeb AWS je 33 % až 35 % a provozní zisk kolem 25 mld. USD.
The firm said it expects Amazon to report second-quarter results during the week of July 27, with broad-based strength led by accelerating growth in Amazon Web Services (AWS).
AWS Growth And Earnings ExpectationsBNP Paribas analyst Nick Jones expects investors to focus on four key areas: AWS growth and capital spending trends amid data center component inflation, the impact of Prime Day on retail sales, advertising growth and operating income margins as the company continues investing heavily in AI infrastructure.
The brokerage expects AWS revenue growth of 33% to 35% in the second quarter, above the consensus estimate of about 31%. It also projects operating income of about $25 billion, compared with the Street consensus of $23.6 billion.
Third-Quarter Outlook And AI SpendingFor the third quarter, BNP Paribas believes investors are looking for Amazon to guide toward the high end of its outlook, with revenue of about $207 billion and operating income of $26 billion. Those figures are above current consensus estimates of $204 billion and $25 billion, respectively.
The firm added that investors are also likely to expect higher full-year 2026 capital expenditure guidance as rising data center component costs increase AI infrastructure spending.
Retail Trends And Financial EstimatesBNP Paribas said data indicate Amazon’s Online Stores and Third-Party Seller Services businesses remain broadly in line with Wall Street expectations, implying about 14% year-over-year revenue growth. The firm left its financial estimates unchanged ahead of the earnings release.
Valuation And Analyst ViewDespite ongoing concerns about the return on investment from data center spending, BNP Paribas said it expects continued AWS acceleration and solid execution across Amazon’s businesses.
The firm also said the stock’s current valuation remains an attractive entry point, with shares trading broadly in line with their six-month average forward enterprise value-to-EBITDA multiple.
Earnings And Analyst OutlookAmazon is expected to report second-quarter earnings on or around July 30.
Wall Street expects earnings of $1.82 per share, up from $1.68 a year earlier. Revenue is projected to increase to $196.02 billion from $167.70 billion.
The stock carries a consensus Buy rating with an average analyst price forecast of $320.55. Recent analyst actions include:
TD Cowen: Maintained Buy and lowered its price forecast to $340 on July 8. Wells Fargo: Maintained Overweight and raised its price forecast to $313 on July 2. Truist Securities: Maintained Buy and raised its price forecast to $320 on May 29. Amazon Technical AnalysisAmazon traded about 0.6% above its 20-day simple moving average of $239.53.
However, the stock remained about 5.2% below its 50-day simple moving average of $254.20. That suggests the intermediate-term recovery has yet to gain momentum.
The relative strength index (RSI) stood at 46.61, indicating neutral momentum. The reading suggests sellers still hold a slight advantage, although the stock is not yet in oversold territory.
The longer-term trend remains constructive. Amazon continues to trade above its 200-day simple moving average of $233.21. The 50-day moving average also remains above the 200-day moving average following a golden cross formed in May.
Traders are watching resistance near $249.50, close to the 50-day moving average. Initial support sits around $225, where buyers previously stepped in.
AMZN Stock Price Activity: Amazon.com shares were down 0.99% at $241.20 at the time of publication on Thursday, according to Benzinga Pro data.
Photo via Shutterstock
Market News and Data brought to you by Benzinga APIs
Amazon vyvíjí nový projekt Alexa s kódovým označením Moonraker, který má zvládat složitější vícekrokové úkoly. Interní dokumenty jej označují za nejdražší novou iniciativu Alexa+, s odhadovanými náklady na GPU přes 100 milionů USD v roce 2026.
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Panos Panay, Amazon's SVP of devices and services Bloomberg/Getty Images Amazon's next Alexa AI upgrade may be able to handle more complex tasks. Getting there is expensive, though.
Internal planning documents reviewed by Business Insider show Amazon is working on a previously unreported Alexa project, codenamed Moonraker, to handle more complex, multistep tasks for users.
Moonraker pushes Alexa into the AI agent race. Alexa+, its AI-powered assistant, already lets users book rides or buy tickets through partners such as Uber and Ticketmaster. Moonraker would take that a step further by completing multiple actions from a single request.
The project also highlights the steep cost of building more capable AI. Internal documents show Moonraker quickly became one of the most expensive parts of Amazon's latest Alexa+ overhaul.
Amazon has been working through several Alexa+ growing pains. The company delayed the assistant's rollout multiple times before expanding availability in the US earlier this year. Business Insider previously reported that internal beta testing uncovered problems, such as hallucinations and inconsistent responses, with one employee saying Alexa mistakenly turned off a fish tank filter, killing their fish.
Despite these challenges, Amazon remains committed to expanding Alexa+. In his latest annual shareholder letter, CEO Andy Jassy said customers are talking to Alexa+ twice as much and placing online orders three times more often than before, adding that "Alexa is still early in its journey to be the world's best personal assistant." Amazon declined to comment.
Multiple requestsThe documents describe Moonraker as enabling "multi-request" engagements, offering examples such as "book me a ride and text my friend."
Rather than responding to a single command, the upgrade is designed to help Alexa complete several related actions within one interaction.
It's a move that mirrors other companies, such as OpenAI, Google, and Anthropic, that have introduced agentic AI products that can browse the web and complete multistep workflows.
"Highest cost" new initiativeMoonraker's ambitions, however, come with a hefty price tag.
One planning document from earlier this year called it Alexa+'s "highest cost" new initiative, projecting more than $100 million in GPU costs in 2026. The document suggested delaying or scaling back the project as one way to ease cost pressures.
Some Amazon leaders feel the team has overspent on the AI models powering Alexa, and the cost of running those models has become a growing internal concern, according to a person familiar with the matter. The pressure reflects a broader reckoning across Silicon Valley as companies grapple with the rising cost of deploying advanced AI systems.
Separate planning documents from late last year show Amazon preparing hundreds of Nvidia GPUs to support Moonraker and using an Anthropic Sonnet model for advanced reasoning and visual response functions as engineers tested the system ahead of a wider rollout.
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Eugene Kim You're currently following this author! Want to unfollow? Unsubscribe via the link in your email.
Eugene is Business Insider’s Chief Tech Correspondent, where he leads coverage of Amazon. His reporting spans the company’s retail operations, AWS, Alexa, and its secretive internal work culture.Previously, he worked at CNBC, Fortune Magazine Korea, and Japan's Yomiuri Shimbun. He holds degrees from NYU and Columbia University’s Graduate School of Journalism.In 2022, Eugene broke a story uncovering Amazon’s practice of deceptively enrolling customers in Prime and deliberately making cancellation difficult. A year later, the Federal Trade Commission sued the company, citing his reporting. That case culminated in a record $2.5 billion settlement in 2025.His reporting has earned multiple honors, including the SF Press Club’s Bay Area Journalism Award and SPJ NorCal’s Excellence in Journalism Award.Eugene lives in the Bay Area. Contact him via email at [email protected], or Signal, Telegram, or WhatsApp at 650-942-3061. Use a personal email address, a nonwork WiFi network, and a nonwork device; here's our guide to sharing information securely. ExpertiseAmazon, Jeff Bezos, Andy Jassy, e-commerce, and cloud computing.Popular ArticlesAmazon:Internal Amazon emails give an exclusive look at how CEO Andy Jassy has started to run the company, with obsessive attention to the retail business and what some employees feel is micromanagingAndy Jassy will be the next CEO of Amazon. Insiders dish on what it's like to work for Jeff Bezos' successor, who built AWS into a $40 billion business.Internal documents show Amazon has for years knowingly tricked people into signing up for Prime subscriptions. 'We have been deliberately confusing,' former employee says.Inside Amazon's flailing brick-and-mortar ambitions: missed projections, pressure to cut costs, and a war with Whole FoodsInside Amazon's complex employee-review system, where workers feel left in the dark and managers expect to give 5% of reports bad reviewsAfter 28 years, 'Day 2' finally arrives at AmazonAWS, Alexa, healthcare:Inside Amazon's struggle to break into the lucrative market for SaaS business applications, including an internal pitch to buy $38 billion HubSpotInside Amazon's struggle to crack Nvidia's AI-chip dominanceAmazon's AI data center dream runs into the reality of 'zombie' facilities, higher costs, and labor shortagesAmazon is gutting its voice assistant, Alexa. Employees describe a division in crisis and huge losses on 'a wasted opportunity.'Amazon is working on a new 'Remarkable Alexa,' but internal politics and technical issues plague the projectAmazon projected huge losses from its healthcare business in 2024, but strong sales growth, internal document reveals
Amazon Artificial Intelligence AWS More Generative AI Exclusive Alexa OpenAI Google Anthropic Chatbots
Amazon plánuje v roce 2026 investovat 200 miliard USD do datových center, což tlačí na ocenění akcií. AWS přitom ve 1. čtvrtletí tvořil 59 % provozního zisku při 21 % tržeb.
Amazon (AMZN +0.84%) and the phrase "cheap stock" have historically not been associated with each other. For the better part of two decades, Amazon has traded at meaningful premiums as it has grown its dominant e-commerce empire. Now, it's building another empire in a different space: cloud computing. It has been pouring major resources into expanding its artificial intelligence computing footprint, and plans to lay out a jaw-dropping $200 billion on data center capital expenditures in 2026.
The market isn't enthusiastic about that level of spending, which is why the stock isn't trading at its usual premium valuation. As a result, I think now is the perfect time to load up on Amazon shares, as this weaker short-term sentiment is exactly what long-term investors need to gain an upper hand.
Image source: The Motley Fool.
AWS is a major part of the Amazon investment thesis Amazon's commerce growth in North America has maxed out, and the result of that is that its revenue growth has become lackluster. However, its cloud computing division, Amazon Web Services (AWS), is arguably a more important part of its business anyway.
During Q1, AWS accounted for 59% of Amazon's operating profits despite only making up 21% of revenue. That's because the operating margin in this segment is far higher than in e-commerce.
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However, AWS is also the fastest-growing segment within Amazon, so this produces double the effect. During Q1, AWS grew at a 28% rate -- the best in nearly four years. But that growth rate is expected to continue ramping up, as Amazon is spending big on new data centers.
CEO Andy Jassy discussed this effect in his Q1 shareholder letter, noting that the faster AWS grows, the higher its capital expenditures must be to support that growth. AWS has already experienced record-setting growth, and it's clear that more strong growth is on the horizon. Furthermore, AWS already has several customers lined up to use a large chunk of that $200 billion in new capacity it's building, making it a less risky proposition.
As for valuation, there are several ways to value a stock, but when looking at a company where earnings are often heavily affected by one-time costs or changes in the values of investments, using a cash flow-based metric is smart. Because of Amazon's high capex, gauging the stock in relation to cash from operations makes the most sense, as that metric (unlike free cash flow) ignores capital expenditures. From this standpoint, Amazon's stock is near the cheapest level it has been over the past two decades.
AMZN Price to CFO Per Share (TTM) data by YCharts.
With all that in mind, this looks like a perfect time to load up on Amazon shares.
Amazon logo outside an Amazon warehouse in Manchester, Britain, October 28, 2025. REUTERS/Phil Noble/File Photo Purchase Licensing Rights, opens new tab
CompaniesJuly 7 (Reuters) - Amazon.com (AMZN.O), opens new tab is looking to raise at least $25 billion through a U.S. dollar bond sale, Bloomberg News reported on Tuesday, in the company's latest push to fund its hefty AI investments.
Tech companies have been tapping debt markets and launching equity sales to fund their costly AI infrastructure build-out. Big Tech, including Amazon, Alphabet (GOOGL.O), opens new tab, Microsoft (MSFT.O), opens new tab and Meta (META.O), opens new tab, are expected to spend more than $700 billion on AI this year.
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The size of Amazon's offering could increase depending on investor demand, Bloomberg said, citing people familiar with the matter. Amazon did not immediately respond to a Reuters request for comment.
A regulatory filing by the tech giant from earlier in the day showed it has filed for an eight-part offering of floating and fixed-rate notes.
Turning to debt and equity offerings for capital marks a shift for the Silicon Valley giants, who have typically relied on their cash reserves to fund their investments. The recent debt offerings have seen strong investor appetite.
Google-parent Alphabet last month said it would raise some $85 billion in an upsized equity sale. Facebook-parent Meta earlier this year sold investment-grade bonds worth $25 billion, following a $30 billion bond sale in October, which was the company's biggest ever.
Amazon said in its exchange filing that Barclays, Goldman Sachs, J.P. Morgan and Morgan Stanley are the joint book-running managers for the offering.
The company had in March targeted a $37 billion raise in a heavily oversubscribed 11-part bond sale.
Reporting by Deborah Sophia in Bengaluru; Editing by Shilpi Majumdar and Arun Koyyur
Our Standards: The Thomson Reuters Trust Principles., opens new tab
Amazon plánuje získat nejméně 25 miliard USD prodejem dluhopisů na financování rozšiřování AI infrastruktury. Zároveň uvedl, že letos už žádný další dluh nevydá.
Amazon plans to raise at least $25 billion through an eight-part bond sale, as it looks to continue its massive artificial intelligence buildout, sources told CNBC's David Faber.
The company has also shared with its underwriters that it won't issue any more debt this year, according to people familiar with the matter, who asked not to be named because the details are private.
Amazon disclosed plans for the capital raise in a filing with the SEC on Tuesday, but it didn't disclose the dollar amount.
Bloomberg was first to report the value of Amazon's bond sale.
The debt sale comes after Amazon raised roughly $54 billion in bonds earlier this year in the U.S. and Europe, followed by a $10 billion bond raise in Canada in June.
Tech companies have turned to the capital markets to help fund their aggressive spending plans on AI infrastructure. Nvidia, Oracle, Alphabet and Meta have also announced debt raises and issued stock in recent months.
Amazon has projected its capital expenditures will reach $200 billion this year, up from $131 billion in 2025, with most of the spending going toward data centers, chips and other equipment. CEO Andy Jassy has tried to reassure investors skeptical of its plans by arguing AI is a "once-in-a-lifetime opportunity" that requires big bets.
An Amazon spokesperson told CNBC in a statement that proceeds from the latest bond sale will be used for general corporate purposes, which could include supporting investments, funding future capital expenditures and debt repayment.
"We regularly evaluate our operating plan and make financing decisions, like issuing bonds, accordingly," the spokesperson said.
— CNBC's Jim Forkin contributed reporting to this story.
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by Lisa Stiffler on Jul 6, 2026 at 1:09 pmJuly 6, 2026 at 1:11 pm
Amazon’s headquarters buildings and the Spheres in Seattle’s Denny Triangle neighborhood in September 2024. (GeekWire Photo / Kurt Schlosser) Amazon has cut a total of 57 jobs in Washington state across various teams, including roles at the director and senior manager levels, according to a filing made public Monday morning.
People impacted by the cuts include 16 software engineers as well as product managers and creative marketing employees working in Seattle and Bellevue offices. Nine remote employees, including investigation specialists and risk managers, were also let go.
Employees were notified of the layoffs throughout May and in early June, according to an Amazon filing with the Employment Security Department, released Monday under the Worker Adjustment and Retraining Notification (WARN) Act. The roles are scheduled to end in August.
“[W]e filed a WARN notice because a few businesses across the company made organizational changes that each impacted a small number of employees — in most cases fewer than five employees per business,” said Brad Glasser, an Amazon spokesperson, via email.
WARN notifications are triggered by state law when more than 50 Washington-based employees in total are laid off over a period of 30 days.
“We don’t make decisions like this lightly, and we’re committed to supporting the employees who were impacted,” Glasser added.
It’s a sign of the broader belt-tightening across the tech industry. Microsoft separately cut more than 600 jobs in Washington state on Monday morning, part of global layoffs eliminating 4,800 roles across the Redmond company, primarily in sales, consulting and gaming.
The latest Amazon cuts follow layoffs of 2,198 Washington-based employees in February and 2,303 in October 2025. Globally, the company has eliminated roughly 30,000 positions in the past year, cumulatively amounting to the the largest workforce reduction in its history.
The multiple rounds of layoffs have hit wide-ranging positions and divisions, with software engineers the hardest hit. Corporate support, commercial functions, legal, tax, and ad sales positions have all seen cuts, as have Amazon’s core technology organization, gaming division and robotics unit.
The previous larger cuts were part of an effort to “reduce layers, increase ownership, and remove bureaucracy,” according to a memo sent to employees and posted online earlier this year by Beth Galetti, senior vice president of people experience and technology.
Amazon’s corporate roles numbered around 50,000 in the Seattle area.
Tech giants nationwide have made round after round of job cuts in the past year as they pour billions into AI data center expansions and gain labor efficiencies through the use of artificial intelligence.
Amazon reported $181.5 billion in sales for the first quarter of this year, up 17% from a year earlier. Profits came in at $30.3 billion, boosted by gains tied to the value of its investment in Anthropic.
These may be the last days of Amazon’s Mechanical Turk.
An announcement on the Mechanical Turk website says that on July 30, 2026, the crowdsourcing service will close to new customers. Amazon Web Services says the decision was made after “careful consideration,” adding, “Existing customers can continue to use the service as normal. AWS continues to invest in security and availability improvements for Mechanical Turk, but we do not plan to introduce new features.”
In other words, Amazon isn’t completely pulling the plug, but the service is very much on life support.
First launched in 2005, Mechanical Turk was a marketplace where people were paid tiny amounts to perform simple tasks that resisted full automation — things like completing CAPTCHA challenges or identifying the basic sentiment in a sentence.
In its heyday, the service was at the center of debates around the ethics of crowdsourced labor, and it even played a small role in the early stages of the Facebook-Cambridge Analytica scandal.
Beginning in 2018, Amazon also began billing it as a way for companies to annotate data to train neural networks as part of its SageMaker AI service.
Less overtly, Mechanical Turk has also been described as the hidden enabler for companies taking a fake-it-till-you-make-it approach to AI, where products marketed as Ai are actually being performed by the Mechanical Turk workforce — all the more fitting since the original Mechanical Turk was itself a hoax, with a hidden human chess player pretending to be a chess-playing machine
Over time, the relationship between Mechanical Turk and AI models grew even more complicated. In a snake-eating-its-own-tail irony, a 2023 analysis found that between 33% and 46% of workers on the platform were using large language models to complete their tasks, raising questions about the reliability of data annotated on the platform and also about whether humans needed to be in the loop at all.
This week, after Amazon’s decision became public, one Reddit user suggested the platform died “years ago,” with workers and researchers abandoning it due to bots and fraud. The user predicted, “Someone at Amazon is going to decide keeping the Mturk servers running is a waste of time and resources and pull the plug entirely.”
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Anthony Ha is TechCrunch’s weekend editor. Previously, he worked as a tech reporter at Adweek, a senior editor at VentureBeat, a local government reporter at the Hollister Free Lance, and vice president of content at a VC firm. He lives in New York City.
You can contact or verify outreach from Anthony by emailing [email protected].
Amazon zvyšuje investice do AI a datových center; capex má v roce 2026 dosáhnout 200 miliard USD. Volný peněžní tok za posledních 12 měsíců spadl na 1,2 miliardy USD.
Amazon (AMZN +0.55%) certainly makes the short list of the best-performing stocks so far this century. Over the past two decades, shares have risen 12,350% (as of June 29). You would have over $1.2 million today if you made a hypothetical $10,000 investment in late June 2006.
The "Magnificent Seven" stock currently trades 13% off its peak, which can be viewed as an attractive entry point to acquire a disruptive enterprise with a strong position in online shopping, digital advertising, and cloud computing.
It's a good idea not to rush, though. Don't buy Amazon shares until you read this first.
Image source: The Motley Fool.
Pouring money into AI investments When Amazon announced its 2025 fourth-quarter financial results in February, what caught the market's attention was that the company upped its guidance for capital expenditures (capex). It plans $200 billion in capex in 2026, up from $131 billion last year.
The business is one of the hyperscalers; its Amazon Web Services (AWS) segment is the leading cloud computing platform in the world. The company is seeing robust demand from AWS customers, with a backlog of $364 billion as of March 31 (excluding the $100 billion Anthropic deal). This is leading to a surge in capital deployment.
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"This primarily relates to AWS and generative AI, as we invest to support strong customer demand," chief financial officer Brian Olsavsky said on the first-quarter 2026 earnings call when discussing his company's capex during the quarter. The business is investing aggressively to build data centers that power the AI revolution.
This is hitting Amazon's free cash flow (FCF). It posted just $1.2 billion in FCF in the past 12 months, down a notable 95% from the year-ago period. And the consensus view among sell-side analysts is that the business will report negative FCF of $10 billion in 2026.
Should the market give this business the benefit of the doubt? "We believe it to be a massive opportunity with the potential to drive long-term revenue and free cash flow," Olsavsky said on the call when referring to the AI landscape. Management clearly believes all this spending will benefit Amazon well into the future as it builds capacity that it can monetize.
Investors have to ask themselves if they're willing to buy what management is selling. That's the trillion-dollar question. Given the track records of founder Jeff Bezos and current CEO Andy Jassy, it's easy to give Amazon the benefit of the doubt. This company has always prioritized its customers' needs, adopted an extremely long time horizon, and didn't give in to Wall Street's short-term pressures.
This operational DNA is why the stock has performed so well. However, what makes things more complicated is that Amazon has raised more than $80 billion in debt so far in 2026. And we still have more than half of the year left.
It wouldn't be surprising if the market demands a higher return on this AI spending sooner rather than later.
Shares of Amazon (AMZN +0.55%) have nearly doubled since the company's 20-for-1 stock split in 2022. The split made the share price more affordable for more investors, but it wasn't the reason for the stock's climb. Amazon made its retail business more efficient, boosted margins, and continued to grow its cloud business. The more important point for investors today isn't what the stock has already done, but where it's headed next.
The clearest reason the stock looks like an even better buy now is Amazon's rapidly expanding AI infrastructure capabilities. Operating cash flow has climbed to record levels over the past year, giving the company more internally generated capital to fund its next leg of growth.
Image source: The Motley Fool.
Amazon's most profitable business is on fire While the retail business has become more efficient thanks to robotics and cost-control initiatives, the main catalyst for long-term growth is Amazon Web Services (AWS). The cloud business is seeing strong revenue growth and accounts for most of Amazon's operating profit.
Across retail, cloud, and other services, Amazon generated $148 billion in trailing 12-month operating cash flow (cash from operations). This level of cash generation is a competitive advantage in AI. Training and deploying models requires massive investment in data centers, networking, and specialized chips. Amazon's investment in chips is already becoming a large business in its own right.
Within AWS, Amazon's Trainium AI accelerators and Graviton central processing units (CPUs) are now generating more than $20 billion in annualized revenue. Enterprises are increasingly seeking cost-efficient compute, and custom chips can materially reduce the cost of running AI workloads at scale. Amazon says it has more than $225 billion in commitments tied to Trainium usage from major AI players, including Anthropic and OpenAI.
This momentum points to enormous upside in Amazon's most profitable business. AWS revenue grew 28% year over year in the first quarter. On a trailing 12-month basis, this segment alone now generates $137 billion in revenue and $48 billion in operating income.
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Why the stock is a better buy than in 2022 Free cash flow is down because Amazon is spending aggressively on AWS capacity -- a common cash sink in this era of massive AI data center builds. That's exactly why cash from operations (CFO) is a more useful metric for valuing the stock right now -- it better reflects the business's earning power while investment ramps up.
On a per-share basis, the stock trades at about 18 times CFO, cheaper than at the time of the 2022 stock split, when it traded at 32 times. Given Amazon's stronger profitability, higher cash generation, and much deeper AI capabilities today, the stock looks more attractive now than it did just after the split.
Amazon Leo po vypuštění 29 satelitů oznámila, že má dostatek pro spuštění komerčního vysokorychlostního internetu ze satelitu ještě letos. Konstelace nyní čítá 396 provozních satelitů.
by Alan Boyle on Jul 2, 2026 at 10:42 amJuly 2, 2026 at 10:43 am
An Atlas 5 rocket lifts off from its Florida launch pad, sending 29 Amazon Leo satellites into orbit. (United Launch Alliance Photo) Amazon says the overnight launch of 29 satellites should clear the way for its Amazon Leo network to start offering commercial high-speed internet service from space this year, in direct competition with SpaceX’s Starlink network.
United Launch Alliance’s Atlas 5 rocket sent the satellites into low Earth orbit from Cape Canaveral Space Force Station at 12:30 a.m. ET today (9:30 p.m. PT Wednesday).
This was the last of eight Atlas 5 launches that Amazon reserved for its satellites. Going forward, ULA will use its next-generation Vulcan rocket to support Amazon Leo’s years-long deployment schedule. Amazon has also made launch reservations with Blue Origin, Arianespace and SpaceX.
The latest liftoff boosts Amazon Leo’s constellation to 396 operational satellites. That will be enough to support continuous connectivity in the initial latitudes targeted for commercial service, according to Chris Weber, vice president of business and product for Amazon Leo.
“Still lots of work ahead — including raising all these new satellites to their assigned altitude — but we’ve completed enough launches for initial service this year, and future missions just add coverage and capacity,” Weber said in a LinkedIn post.
Amazon has been beta-testing the service for months with a select group of customers, but connectivity hasn’t been continuous due to sparse orbital coverage. Amazon Leo’s business plan calls for launching commercial service within a limited zone concentrated at mid-northern and mid-southern latitudes, and gradually expanding the service area as more satellites go up.
“With hundreds of flight-ready satellites standing by at the Cape and a new, dedicated vertical integration facility ready to support Leo Vulcan 1 and subsequent missions, we have a clear path to increase launch and deployment cadence, helping us quickly expand network coverage following an initial service rollout later this year,” Melissa Wuerl, Amazon Leo’s director of launch systems, said in a statement released after the latest launch.
Amazon hasn’t yet announced pricing for satellite broadband service. The first-generation constellation, consisting of 3,232 satellites, is due to reach full deployment in mid-2029 — and Amazon has received regulatory approval for an even larger second-generation constellation.
When Amazon Leo begins commercial service, it will still trail far behind SpaceX’s Starlink satellite network, which has more than 10,000 satellites in orbit and 12 million subscribers. The satellites for both Starlink and Amazon Leo are built in the Seattle area.
In the years ahead, SpaceX plans to beef up Starlink’s capabilities in the emerging market for direct-to-device satellite services. Amazon is aggressively targeting that same market through its recent acquisition of Globalstar. Under a separate agreement tied to the deal, Amazon Leo will start powering Apple’s iPhone satellite services starting in 2028.
Amazon i SpaceX soupeří o větší roli v digitálním životě spotřebitelů, ale Amazon má výrazně silnější základnu: v roce 2025 utržil 716,9 miliardy USD proti 18,7 miliardy USD u SpaceX.
Amazon (AMZN +0.59%) and Space Exploration Technologies (SPCX +0.71%) are both trying to become more important to consumers' digital lives.
Amazon already affects how people shop, watch shows, subscribe to services, use smart-home devices, and interact with cloud-powered technology. SpaceX is using Starlink satellite broadband and direct-to-cell service to bring internet access to consumers.
Image source: Getty Images.
Amazon generated $716.9 billion in net sales in 2025, while SpaceX generated just $18.7 billion in revenue. While that size gap does not automatically make Amazon a better stock, it shows the different risk profiles investors are dealing with.
Amazon is already monetizing consumer behavior at scale Amazon's biggest advantage is that it is already embedded in consumers' daily behavior. In 2025, the company generated $269.3 billion in sales from online stores, $172.2 billion from third-party seller services, $68.6 billion from advertising, $49.6 billion from subscriptions, and $128.7 billion from its AWS cloud computing business. Hence, Amazon earns money at several points in the consumer journey, from product discovery and advertising to subscriptions, transactions, seller services, and cloud infrastructure.
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Its advertising business is also gaining momentum, with revenues rising 24% year over year to $17.2 billion in the first quarter. Many Amazon advertisements appear when shoppers are already comparing products or getting ready to buy. The company's advertising business is proving to be a competitive edge because Amazon is monetizing purchase intent, not just screen time.
Amazon's relationship with consumers also extends well beyond shopping. Prime, Prime Video, Kindle, Fire TV, Echo, Ring, Blink, and eero give the company multiple ways to connect to customers across entertainment, reading, smart-home devices, home security, subscriptions, and Wi-Fi.
Beyond all of that, though, AWS continues to be a key growth engine. In the first quarter, AWS revenue rose 28% year over year to $37.6 billion, while AWS operating income reached $14.2 billion, up from $11.5 billion in the prior-year period. The company's large and highly profitable cloud computing business will play a pivotal role in Amazon's artificial intelligence (AI) ambitions.
Amazon possesses the consumer data and cloud infrastructure to support more personalized shopping tools, smarter ads, better digital assistants, and cloud services for companies building their own AI products. The company recently launched Alexa for Shopping, a new AI shopping assistant built from Rufus and Alexa+. Rufus helps shoppers compare products and answer shopping questions, while Alexa+ adds a more conversational and personalized experience across Amazon's app, website, and devices.
The AWS AI infrastructure is also supported by large customer commitments. OpenAI has committed to lease approximately 2 gigawatts of computing capacity powered by Amazon's custom Trainium chips. Anthropic has also committed to securing up to 5 gigawatts of Trainium capacity. Meta Platforms has signed an agreement to deploy tens of millions of Amazon's custom Graviton server chips to support AI workloads.
Amazon Leo, formerly known as Project Kuiper, is the company's low Earth orbit satellite internet network. As of mid-June, the constellation had grown to 367 satellites, and the company has secured more than 100 rocket launches to deploy additional satellites. It's becoming a formidable player in the satellite broadband market.
Additionally, Amazon's agreement to acquire Globalstar could help Amazon Leo connect directly to phones for voice, data, and messaging services beginning in 2028. The company has also entered into a multiyear agreement with Delta Air Lines to install Amazon's Leo satellite technology on its aircraft, with an initial installation on 500 planes starting in 2028.
However, the main risk for Amazon is its elevated spending. Amazon's trailing-12-month free cash flow fell sharply in the first quarter as its AI-related infrastructure spending rose. The company also faces regulatory pressure and heavy competition.
Yet, Amazon is funding these bets from a much stronger profit base than SpaceX.
SpaceX is trying to move closer to consumers through Starlink The biggest way SpaceX could move closer to consumers is through Starlink mobile.
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SpaceX already offers direct-to-cell satellite technology with T-Mobile US in the U.S, allowing compatible phones to connect through Starlink when they are in locations where regular tower coverage is weak or unavailable. According to Reuters, SpaceX also plans to launch a Starlink mobile service via a consumer mobile plan or a mobile connectivity product for U.S. consumers, which could put it in direct competition with Verizon Communications, AT&T, and T-Mobile US. This could position SpaceX as a prominent consumer telecommunications player.
With nearly 10.3 million subscribers, Starlink is already a meaningful consumer internet business. If it expands into mobile service, Starlink could become more useful for travel, emergency coverage, and areas with weak cellular networks.
SpaceX is also expanding its satellite capacity for a larger Starlink business. In January, the Federal Communications Commission approved the company's request for permission to deploy an additional 7,500 Gen2 Starlink satellites, which would bring SpaceX's authorized network to 15,000. More satellites will help Starlink improve coverage, support direct-to-cell service, and eventually offer faster mobile applications. SpaceX's recent purchase of wireless spectrum from EchoStar is also significant because spectrum is essential for expanding wireless connectivity.
However, investors should not view Starlink mobile as a full replacement for regular wireless networks or 5G service yet. And the bigger issue for investors is valuation and execution risk. SpaceX still trades at about 82 times trailing-12-month sales even after its post-IPO pullback. That type of ambitious valuation is particularly difficult to justify for a company that is still relying heavily on Starlink's profits while pouring funds into rockets, AI infrastructure, spectrum expansion, and mobile ambitions. The Starship rocket, which has yet to carry a commercial payload, is especially important because it could help SpaceX launch larger satellites and expand Starlink capacity more efficiently, but delays would weaken a major part of the company's growth story.
SpaceX can prove a more disruptive connectivity story if Starlink mobile becomes a widely used consumer wireless platform. But Amazon looks like the stronger risk-adjusted winner in the race to own a piece of consumers' digital lives.
