Amazon.com, Inc.

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Bullish +65

Amazon (AMZN) Stock Gains as AWS Growth Hits a Five-Year High

Analyst upgrade Cloud expansion New AI features AI-generated analysis

πŸ“ˆ AWS revenue climbed over 39% year over year to $46 billion, marking its fastest growth pace in nearly five years.

πŸ’° AWS operating income jumped 55% to more than $17 billion, driving about 60% of Amazon's total operating income.

πŸ“… Contracted AWS backlog reached $578 billion, reflecting a triple-digit year-over-year increase in future revenue visibility.

πŸ€– Usage of Amazon Bedrock AI inference service is climbing fast, with Fortune 500 customers spending seven times more than a year earlier.

πŸ“‰ Q3 EPS of $1.89 and revenue of $201.94 billion both missed analyst estimates for the broader group.

πŸ’Έ Amazon raised its 2026 capital spending forecast to $220 billion, which is currently weighing on free cash flow.

πŸ“Š Analyst consensus remains 'Moderate Buy' with an average price target of $321.74 and recent upgrades from Phillip Securities.

πŸ›οΈ Policy attention is increasing regarding rules that may require tech firms to pay more for data-center power and grid costs.

🧠 Insiders sold 71,589 shares worth $18.5 million over the last quarter under pre-arranged plans.

πŸ›οΈ Amazon is testing text-based shopping through Alexa for select U.S. customers to find products and complete purchases.

Bullish Signals
  • AWS revenue rose more than 39% to $46 billion, its fastest pace in nearly five years, with operating income jumping 55% to over $17 billion.
  • The contracted AWS backlog reached $578 billion, up triple digits year over year, signaling strong future demand for cloud services.
  • Usage of Amazon Bedrock AI inference service is climbing fast, with Fortune 500 customers spending about seven times more than a year earlier.
  • CEO Andy Jassy stated AWS could become a trillion-dollar business within five to 10 years, with growth expected to last through at least 2028.
  • Advertising revenue grew 12% in the quarter, with management expecting growth in the high teens next year.
Risk Factors
  • Q3 EPS of $1.89 and revenue of $201.94 billion both missed analyst estimates, indicating softer performance for the broader group.
  • The bill for demand is large, with Amazon raising its 2026 capital spending forecast to $220 billion, which is currently weighing on free cash flow.
  • CEO Andy Jassy noted that even the increased spending may not fully meet demand until new data centers start paying off.
Full Analysis
Amazon (AMZN) stock opened at $259.30 on Monday following a slight dip in Friday's session, trading within its 52-week range of $196.00 to $287.20 with a market cap of approximately $2.80 trillion. Despite the quiet tape, the company reported robust growth in its cloud computing division, Amazon Web Services (AWS), which posted revenue of $46 billion, representing an increase of over 39% year over year. AWS operating income surged by 55% to exceed $17 billion, accounting for roughly 60% of Amazon's total operating income. The unit also reported a contracted backlog reaching $578 billion, a triple-digit gain from the prior year, indicating strong future demand. Usage of AI inference services like Amazon Bedrock is accelerating, with Fortune 500 customers spending seven times more than a year earlier. However, broader group results showed a softer performance as Q3 earnings per share of $1.89 and total revenue of $201.94 billion both missed analyst estimates. To meet this demand, Amazon raised its 2026 capital spending forecast to $220 billion, which is currently weighing on free cash flow until new data centers become operational. Analysts maintain a 'Moderate Buy' consensus with an average price target of $321.74, though insider selling activity was noted in the last quarter. The company continues to innovate with text-based shopping features via Alexa for select U.S. customers.