Amazon’s stock (NASDAQ:AMZN) is trading 3.14% higher today ahead of earnings, boosted overnight be impressive numbers from Microsoft Azure.
Amazon will put up numbers after the closing bell, with the Street looking for EPS of US$1.82, on revenue of $196.43billion. That would represent an 8.2% growth in EPS Y/Y, and a 17.13% sales growth rate.
With analyst forecasts spanning US$187.98 billion to US$200.1 billion, there remains uncertainty about consumer demand and cloud growth rates amid the current spending cycle.
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The earnings print arrives after a bruising week for the Magnificent Seven tech stocks, which collectively lost US$797 billion in market value this time last week following Alphabet’s increased capital expenditure outlook. Meta’s own announcement of increased Capex overnight has also seen shares trade down 8.6%.
Looking to analysts for clues, Bank of America maintains a Buy rating and US$310 price target on Amazon heading into the print, though the broader analyst community has turned more cautious on megacap tech following last week’s sell-off.
AWS revenue growth and operating margin will be the most scrutinised metrics in the report, with markets seeking clarity on whether Amazon can maintain cloud profitability while ramping capital expenditure for AI infrastructure, particularly after Alphabet spooked markets with its own increased spending plans. Microsoft’s beat overnight has sent shares almost 9% higher, supporting the view that AWS may well chart a similar course. The guide for 45% in growth for Azure has set the bar high, with AMZN trading partly in sympathy.
Management commentary on AI capital expenditure plans for the second half of 2026 and into 2027 will be critical. The market is now questioning whether these infrastructure investments will generate near-term returns or simply compress margins across the sector.
With Amazon’s stock price sitting at break even on a YTD basis before the pre-market move, there will be plenty of eyes on the direction of today’s action. Options markets are pricing a ~6.5% following the print, potentially setting the stage for the second half of calendar 2026.
