AWS growth has accelerated for five straight quarters, and advertising and retail margin gains are adding to profit. The shares sit about 11% below the August record, which leaves room if the capex spend converts to revenue.
Amazon is the leading online retailer and marketplace for third party sellers. Retail related revenue represents approximately 74% of total, followed by Amazon Web Services (17%), and advertising services (9%). International segments constitute 22% of Amazon's total revenue, led by Germany, the United Kingdom, and Japan.
www.amazon.com- 1Q3 results on Oct 29 (date not yet confirmed by the company): a sixth straight quarter of AWS acceleration above 36.7%.
- 2Q3 operating income landing in or above the $22.5B to $26.5B guidance range.
- 3Q4 holiday-quarter guidance and 2027 capex commentary at the Feb 2027 report, plus ad growth holding in the mid-20s.
- 1Capex of about $220B pushed Q2 free cash flow to a $7.6B outflow, and any AWS slowdown would hit returns on that spend.
- 2Q2 EPS was inflated by a roughly $53B investment gain, so headline earnings flatter the multiple.
- 3The stock has already rallied from the $196 low, and a macro or AI-sentiment pullback could cut multiples across big tech (beta about 1.5).
Read the Full Thesis
- Oct 13, 2026 · Price 259.8
Weekly check-in: On Track. No new results; AWS thesis intact, Q3 date still unconfirmed, stock near entry Nothing in the past week changes the Q2 evidence behind the case: AWS grew about 37% and operating income was $27.5B. The next test is the Q3 report, expected around Oct 29, which Amazon has not confirmed. New items are a Wells Fargo target trim (it kept its Buy rating) and a WSJ report that Amazon is in talks to buy AI startup Decart for about $7B. That deal is not capex, but it adds to the AI spending the market already worries about. One detail in the case needs correcting: sources tie the $7.6B free cash flow outflow to the trailing twelve months, not to Q2 alone.
- Oct 20, 2026 · Price 262.45
Weekly check-in: On Track. Q3 date confirmed for Oct 29; Morgan Stanley lifts AWS forecasts, no new results The main change since Oct 13 is that the catalyst date is now firm. Amazon has said it will hold its Q3 call on Oct 29 at 5pm ET. Morgan Stanley's top-pick call and higher AWS forecasts lifted the shares about 5% on Oct 19 to roughly $262. That is a sentiment and estimate move, not new company evidence, so the thesis still rests on the Q3 print. The Q2 facts the case relies on (AWS +37%, $496B backlog, Q3 operating income guidance of $22.5B to $26.5B) are unchanged.
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