Jason Luongo
Growth-Stock Options Trader, LEAPS & Income Strategies
Amazon's AI cloud business is accelerating even as the stock sits 11% below its August high. Q2 revenue grew 20% to $200.6 billion, AWS grew 37% to $42.2 billion, its fastest in 18 quarters, and the AWS backlog stands at $496 billion. The custom chip business now runs above $25 billion a year, with Anthropic and OpenAI both committed to Trainium. x.comÂ
Amazon's AWS is accelerating while the stock sits 10% off its high on the FTC ad lawsuit and $220B of capex. AWS grew 37% to $42.2B, its fastest growth in 18 quarters, with operating income up 43%. The AI and chips businesses are each running above $25B annualized, and Anthropic committed more than $100B to AWS over ten years on 5 GW of Trainium. The stock trades at about 28x forward earnings. x.comÂ
Amazon's record AI spending looks backed by AWS demand, despite pressure on near-term profit. AWS grew 39% to $46bn, and CEO Andy Jassy projects growth above 40% in both 2027 and 2028. Quarterly capex reached $77.3bn, almost $20bn above expectations; the Q4 profit guide missed and retail ads softened. AWS acceleration makes the drop worth buying. Overweight; $370 target. x.com x.comÂ
Amazon's AWS growth remains strong despite slight earnings misses. AWS revenue rose 39% year over year in Q3. Increased 2027 capex could still weigh on the shares in the short term, even if demand continues to rise. x.com x.com x.com x.comÂ
Amazon looks set to rally into its Q1 report and then fall again, because heavy non-AWS investment weighs on operating income and the stock works in harvest years, not investment years. A clean operating income guide needs a huge AWS beat to flow through, and people already put out very high AWS numbers. Layoffs help, but not enough against data-center and fulfillment efficiency comps. It is a crowded long that has crushed Microsoft on relative performance, with market caps approaching parity. … Show more
Amazon's AWS demand exceeds supply through at least 2027, and $496B of contracted backlog derisks its capex. AWS revenue grew 37% to $42.2B, its fifth straight acceleration and fastest growth in 18 quarters. CEO Andy Jassy says 2027 capacity is largely reserved, and Anthropic and OpenAI made multi-gigawatt Trainium commitments. Capex rose $20B to about $220B, mainly on memory costs, and trailing FCF is -$7.6B, but the backlog supports it. Possibly the best hyperscaler earnings this quarter. … Show more
Amazon's accelerating AWS growth at high margins shows the strength of its moat, but returns on heavy capex remain unproven. AWS grew 39% to $46B, its fastest growth in nearly five years, at a 38.7% operating margin; Amazon posted record operating income. Online stores grew 2%, while ads grew 11%, down from 26% last quarter. Trailing free cash flow fell to -$42.4B as net capex reached $210.7B. Returns on about $220B of planned 2026 capex remain the open question, with free cash flow the test. … Show more
Amazon is lining up $10 billion more for OpenAI, a company whose CFO Sarah Friar has voiced worry, per Bloomberg, that it may not be able to pay future compute contracts if revenue does not grow fast enough. OpenAI, valued at $852 billion with no actual profit, is a hole that eats Nvidia GPUs and investor cash, and AWS ends up funding a customer it competes against. This looks like a WeWork moment in data centers, not an iPhone moment. x.comÂ
Amazon's AWS growth still drives its valuation, making the post-earnings decline look temporary despite misses elsewhere. AWS grew 39% to $46 billion, above the $45.4 billion expected; Jassy sees growth above 40% in both 2027 and 2028. Earnings, advertising and Q4 sales guidance missed expectations, while trailing free cash flow was negative $42.4 billion. x.com x.comÂ
Amazon's faster AWS growth and broader profit support its investment case, but returns on infrastructure spending remain uncertain. AWS supplied about 60% of the $10.7B rise in operating income and North American retail about 37%. Trailing net capex of $210.7B exceeded $168.3B of operating cash flow. Much of the spend is on chips and servers with lives well under a decade; the test is how quickly capacity becomes AWS revenue. x.com x.com x.comÂ
Hyperscalers' incremental return on capital is cratering, so hard spending decisions are coming. In the June quarter, Amazon, Microsoft and Alphabet grew LTM EBIT 20% but needed 38% more deployed capital, before token prices cratered and with much demand from non-self-sustaining OpenAI. Compute and models may become a utility-like commodity. Insiders are selling, with Jeff Bezos filing to sell $4B of Amazon stock, and Google's $25B bond deal widened hyperscaler credit spreads. x.com x.comÂ
AWS's rapid growth in a huge business makes the long-term outlook decisively bullish for Amazon and the AI ecosystem. AWS revenue grew 39.3% year over year in September 2026; management guides for growth above 40% in 2027 and 2028. Amazon is always very conservative with guidance, making that AI outlook doubly bullish. x.com x.com x.comÂ
