AMZN
AWS is doing the heavy lifting
Amazon didn’t just report a decent quarter — it basically walked out of the earnings room wearing a cape. BNP Paribas analyst Nick Jones said the company beat expectations across the board, with AWS and advertising doing most of the flexing.
Worlds apart from the usual “we’re cautiously optimistic” corporate wallpaper, Jones argued that AWS backlog jumped more than 150% year over year to $496 billion. That’s the kind of number that makes investors lean forward and ask, “Wait, how big can this thing get?”
The AI spending debate gets a plot twist
Here’s the twist: Amazon is spending more, not less. Management raised its full-year 2026 capital spending outlook to $220 billion from $200 billion, blaming higher memory costs. Usually, that kind of capex news can spook shareholders. But in this case, the market seems to be treating it like Amazon is building the Costco-sized version of cloud infrastructure.
Jones said AWS now looks like at least twice the company’s previous several-hundred-billion-dollar opportunity and could eventually become a $1 trillion business. That’s not exactly the language of a guy looking for a polite 5% pop.
What investors should watch next
The good news:
- AWS is still growing fast enough to justify the AI arms race
- Advertising services also beat expectations
- Amazon’s profit and EBITDA came in ahead of estimates
The catch:
- Third-quarter revenue and operating income guidance landed a bit below consensus at the midpoint
- Prime Day timing helped distort the comparison, which is why management says growth looks better after adjusting for the calendar shuffle
Big picture: Amazon’s story keeps drifting from “online retailer with cloud on the side” to “AI infrastructure landlord with a retail business attached.” And if Wall Street keeps buying that narrative, the stock probably won’t stay in the bargain bin for long.