Amazon is scheduled to report its second-quarter earnings after the bell on Thursday, with analysts expecting earnings per share of $1.82 and revenue of $196.47 billion, according to LSEG estimates [1]. Key segments under scrutiny include Amazon Web Services (AWS), projected to generate $40.54 billion in revenue, and advertising, expected to bring in $19.43 billion, both according to StreetAccount [1].
Investor attention is sharply focused on Amazon's capital expenditures, particularly as the company continues to ramp up investments in artificial intelligence. Amazon's capex reached $44.2 billion in the first quarter, marking a 77% increase year-over-year, and is anticipated to rise further to $49.3 billion in the second quarter, based on FactSet data [1]. The company has maintained its February guidance for 2026 capex at roughly $200 billion, but several analysts, including those at Morgan Stanley, expect Amazon to increase this forecast, potentially reaching $218 billion for the year and rising to $318 billion by 2028 [1].
The market has shown volatility in response to capex announcements from other hyperscalers: Alphabet's shares fell after raising its capex forecast, while Microsoft's stock surged 15% following strong earnings and steady capex guidance. Meta's shares dropped 9% after a light revenue forecast and increased AI spending impacted cash flow [1].
Morgan Stanley analysts remain bullish on Amazon's cloud business, citing 'private lab deals' and deepening partnerships with leading AI providers such as OpenAI, Anthropic, and Meta (the latter through a deal to supply AWS Graviton chips) as catalysts for multi-year growth [1]. AWS revenue is expected to grow 31% year-over-year, up from 28% in the first quarter, which was its fastest growth in over three years [1]. This comes as competitors Google Cloud and Microsoft Azure reported 82% and 43% year-over-year revenue growth, respectively, in their most recent quarters [1].
While Amazon continues to invest heavily in AI and cloud infrastructure, it has also trimmed its corporate headcount [1].
CONCLUSION
Amazon's upcoming Q2 earnings report is highly anticipated, with analysts and investors closely watching capex and AI investment trends. The company's aggressive spending and strong cloud growth outlook position it as a key player in the evolving AI landscape, though market reactions may hinge on any changes to its capex guidance. Overall, Amazon's strategic investments are expected to drive long-term growth, but short-term market sentiment remains sensitive to spending forecasts.