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.com 

AWS is adding substantial operating profit alongside revenue, challenging the case that Amazon's AI buildout lacks earnings power. About $6.3B of incremental profit on $13B of revenue implies nearly 49% incremental margins; inference and Trainium could improve economics. But depreciation lags, AI margins remain lower and $220B planned cash CapEx leaves returns uncertain. If profit and cash flow catch up, the selloff may underestimate long-term earning power; otherwise the discount is deserved. … Show more

Amazon's negative free cash flow and far-off AWS guidance add to its investment risk. Free cash flow is -$42 billion. True_yes_man describes Jassy extrapolating fourth-quarter AWS revenue at 40% growth for five years. That guide cannot be taken seriously; it resembles the Tesla and Nvidia playbook of projecting years ahead to support the market into the midterms, then recalibrating later. x.com  x.com 

AI agents could drive Amazon's AWS compute and storage usage, lifting its operating profit. Inference already accounts for well over half of AWS AI revenue. With AWS at about $171.8B in 2026 revenue, two years of 40% growth and a 37.5% operating margin would yield roughly $126B in 2028 operating income; Jassy expects growth above 40% in both years. Cash capex hit $75.9B in Q3, trailing free cash flow was negative $42.4B, and management expects more spending in 2027. x.com 

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.com 

Amazon's CapEx arms race may not show compelling returns until early-to-mid 2027, the main issue keeping investors from buying the dip. Online growth slowed to 2% year over year, the slowest since 1Q 2023; 3Q CapEx was $77.3B versus $58.8B expected, with FY2026 guidance at $220B. Amazon still looks cheap at 22.1x 2027 earnings versus 15% long-term revenue and EPS growth. x.com 

Amazon's valuation looks attractive against its long-term growth potential despite a weak quarter. The shares trade at 18x forward earnings, 3x sales and a 0.25 forward PEG; AWS and retail could become $2T run-rate businesses over time. Advertising growth slowed to 12% from 26% last quarter, the biggest disappointment. x.com  x.com 

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.com 

Amazon's capex cycle could keep its stock dead money for longer. Guidance for 40% AWS growth over two years suggests spending will continue until at least 2029, and likely beyond; the $370 target Goldman cites assumes an end to that cycle without saying when. x.com 

Amazon's urgent AI buildout is expected to lift revenue and profits permanently despite a higher spending floor. Andy Jassy said spreading capex over 25 years would be preferable, but this opportunity calls for a faster buildout. Longer chip lifecycles and in-house designs should help offset costs. Several companies, including Amazon, are expected to exceed $10T in market value by decade's end. x.com  x.com