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VanquishTrader

Options Prop Trading Firm

30 Oct, 00:06Latest

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. x.com

AMZN

Gaetano

Thematic Investor, Photonics & Physical AI Research

12h ago

AMZN

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

Kaushik

Equity Research Writer for Wiseman Capital

18h ago

AMZN

Amazon's AI investments are becoming a stronger long-term value driver as AWS combines 39% growth with a 39% GAAP operating margin, while custom silicon adds a competitive advantage. Improving commerce margins and management's rising confidence in AI-investment returns increase confidence in the 12-month-plus outlook for Amazon shares. x.com

Pegasus

Long/Short Equity Investor

29 Oct

AMZN

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

Nicholas Mugalli

Institutional TMT & Macro Research, AI/Semiconductors/Policy

29 Oct

AMZN

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

Value Investigator

Quality-Growth Investor, Fundamental Research & Portfolio Strategy

10h ago

AMZN

Amazon's negative free cash flow reflects AI investment, not a lack of cash generation. AWS is accelerating toward more than 40% growth, and the business still prints cash; treating investment-driven negative free cash flow as a fundamental failure misses that distinction. The stock should return more than 20% within a year. x.com x.com x.com x.com

Mostly Borrowed Ideas

Equity Analyst at MBI Deep Dives

11h ago

AMZN

Amazon ads may be structurally disadvantaged by capped ad inventory and AI's limited impact at the bottom of the funnel. Q2-Q3 incremental revenue versus Google fell to 33.4% from 41.8% a year ago; three quarters are a small sample and Q4 may look better. Management's reasonable explanations for soft Q3 ads came only now. Google Cloud revenue hit 66.8% of AWS's, up from 58.6% in Q2, despite AWS expecting >40% growth in 2027-28; TPU system sales complicate the comparison. x.com x.com

M&M Lion Fund

Small-Fund Portfolio Manager Since 2023, IE Business School & Javeriana Background

15h ago

AMZN

AWS growth and a structural cost edge make Amazon one of the best risk-adjusted AI investments and the only 'neocloud' comfortable to own. At 40% y/y AWS growth, 37% margins, $650B backlog by Q1 2027 and 14.5x EV/EBITDA, the stock is worth $330. Jassy says neocloud operating margins trail data-center owners by about 3,500bp; Amazon's own silicon adds to its edge. Trainium going external in late 2027 may be underappreciated. Buying again below $210. x.com x.com

Andres Cardenal

CFA, Economist & Financial Analyst, Investment Columnist

29 Oct

AMZN

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

Roger

Business Owner, Former Assistant Research Professor

27 Oct

AMZN

Amazon's hundreds of billions in AWS GPU spending are generating billions in additional sales without the operating-margin payoff expected from that investment, worsening its credit risk. The attached AWS chart shows quarterly revenue rising from $23.1 billion in Q3 2023 to $42.2 billion in Q2 2026, alongside operating income rising from $7 billion to $16.6 billion; the concern is the return on the GPU spending. x.com

Schulz Duggan

AI Supply-Chain Research, Optics/Memory/Macro, Original Asian/US Filings & Pricing

29 Oct

AMZN

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.com

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