Amazon (AMZN) Earnings: Will Heavy AI Focus Fuel or Harm the Stock in 2026?
Amazon's AI obsession hits the earnings spotlight—investors brace for impact.
Cloud or Crunch?
Amazon Web Services pours billions into artificial intelligence infrastructure, betting big on enterprise adoption. Every data center retrofit, every custom chip rollout, every model-training partnership eats into margins that used to flow straight to the bottom line. The Street watches, calculators ready, wondering if this is visionary capex or just another expensive tech arms race.
The Retail Machine Learns
Back on the digital shelf, AI tweaks the engine. Dynamic pricing algorithms work overtime. Logistics networks self-optimize. Ad targeting gets scarily precise. The question isn't whether it works—it's whether the efficiency gains outpace the colossal R&D spend. Can AI make the 'everything store' profitable on more than just razor-thin volumes?
The Investor's Dilemma
Growth stocks live on narrative, and AI is the only story in town. Amazon's heavy focus gives it a seat at the table with the tech titans. But faith in future profits has a funny way of colliding with present-day P/E ratios. One quarter of softer-than-expected cloud growth could trigger the classic Wall Street pivot from 'investing in the future' to 'demanding fiscal discipline.'
So, does the AI gamble fuel a new growth engine or starve the core business? The earnings call will offer clues, but the market's verdict will be instant—and merciless. After all, in finance, a 'long-term bet' is just another term for a short-term volatility driver.
What to Focus on in Amazon’s Next Quarterly Earnings Report
A focus for the upcoming report, according to Wall Street, besides revenue, will be Amazon’s capital expenditures. The company spent $34.2 billion in cash capex in Q3 and is expected to increase that to $34.9 billion in Q4. Much of that spending is expected to go to AI data centers and continued investment in software/AWS. The company’s CFO Brian Olsavsky said during the company’s Q3 earnings call that the company was on pace to spend $125 billion in 2025 and WOULD continue to ramp that in 2026 as the cloud giant works to meet demand for AI.
Furthermore, Amazon’s spending could prove helpful for chip and infrastructure companies. Still, as Meta’s and Microsoft’s divergent trajectories in the stock market over the past week have shown, Wall Street appears to be especially on edge when it comes to capex. If Amazon’s 2026 spending projections are too much for traders to swallow, the company’s stock price could take a big hit.
Before earnings, Amazon (AMZN) stock has bullish forecasts for the year, ranging from from $244 to $340, suggesting potential upside from the current market price of $224. Cantor Fitzgerald was the latest to reiterate an Overweight rating on AMZN with a price target of $260.
