Here are the Most Important Numbers Wall Street Expects When Amazon Reports Q1 Earnings

Amazon as a whole is worth about $3 trillion after tonight’s after-hours jump.

Its three strongest business lines are its e-commerce business, AWS, and its advertising business. You could make an argument that all three of these businesses would be worth a trillion or more if independently traded.

However, another business Amazon has been growing (that’s under the radar from many investors) is its chip business. This business obviously supports AWS, but Amazon CEO Andy Jassy revealed some eye-popping figures on tonight’s earnings call.

“Our chips business continues to grow rapidly and is larger than what a lot of folks thought. We saw nearly 40% quarter-over-quarter growth in Q1, and our annual revenue run rate is now over $20 billion and growing triple-digit percentages year-over-year. But this somewhat masks the size. If our chips business was a stand-alone business and sold ships produced this year to AWS and other third parties as other leading chip companies do, our annual revenue run rate would be $50 billion. As best as we can tell, our custom silicon business is now one of the top 3 data center chip businesses in the world. The speed at which we’ve gotten here is extraordinary. And we have momentum.

For our custom AI silicon, we’ve recently shared very large multiyear multi-gigawatt training commitments from the 2 leading AI labs in the world, Anthropic and OpenAI, as well as an increasing number of companies like Uber betting on Trainium. And we now have over $225 million in revenue commitments for Trainium. Our Trainium 2 chip has about 30% better price performance than comparable GPUs and is largely sold out. Trainium 3, which just started shipping at the start of 2026 and was 30% to 40% more price performance than Trainium, 2 is nearly fully subscribed. And Trainium 4, which is still about 18 months from broad availability, has already been reserved. Amazon Bedrock, which is used expansively by over 125,000 customers, runs most of its inference on Trainium. Almost 80% of the Fortune 100 companies are using Bedrock. ”

Amazon’s conference call is winding down, but CEO Andy Jassy was quick to note the insane growth rates from the company’s agent software. Here’s what he had to say:

“Most of the value companies derive from AI will be through agents, and AWS customers can build agents with their proprietary data and strands, which has been downloaded more than 25 million times and saw 3x more downloads quarter-over-quarter. Customers can deploy agents with enterprise scale, security and reliability with AgentCore, which is being used to deploy an agent as frequently as every 10 seconds.

We also offer turnkey agents for coding software migrations, business operations and knowledge workers in Kiro, Transform, Connect and Quick, and they continue to resonate with customers. The number of developers using Kiro more than doubled quarter-over-quarter, and enterprise customer usage increased nearly 10x. Customers have used Transform to save over 1.56 million hours of manual effort when migrating and modernizing their workloads. A number of new customers using Quick has grown more than 4x quarter-over-quarter, and we just announced day 1 of our Quick desktop app yesterday. It’s very compelling as it can query your e-mail, calendar, Slack, local files and several other applications you use every day to flag important communications, retrieve and summarize information, make recommendations, compose and send communications to others and create agents that highlight or automatically do work that you used to have to do yourself.

You can easily keep refining your preferences, and Quick’s advanced Knowledge Graph enables the AI agents to automatically learn from your interactions to become more personalized over time. One of our enterprise customers just told us Quick isn’t just improving how we work, it’s letting us reimagine it.”

The exponential growth of agents has become one of 2026’s biggest investing themes with stocks closely aligned with the trend like Intel up 150% year-to-date.

Amazon (NASDAQ:AMZN) delivered a strong top-to-bottom beat, but free cash flow collapsed 95% to $1.2B on capex.

Path to $300: Shares trade at $263.04; Polymarket assigns 0.5 probability to $296 by May. Capex discipline on the call is the swing factor.

Setting Up the 5:30 PM ET Conference Call

Andy Jassy steps to the mic at 5:30 p.m. ET, with the webcast live at amazon.com/ir. Shares are sitting down 2.93% after hours despite the blowout earnings report.

Top 5 Questions Management Must Answer

1. Is the 28% AWS growth rate sustainable, and what is Trainium3 capacity through 2027?
2. How does the ~$200B 2026 capex plan deliver ROI when trailing free cash flow is just $1.2 billion?
3. Tariff impact on retail margins and consumer demand?
4. Can International reverse its 21% YoY operating income decline?
5. Advertising trajectory beyond $70 billion trailing run rate?

Clarifications and Red Flags

Listen for AWS backlog, Project Rainier utilization, Amazon Leo cost ramp, and Rufus monetization. Red flags: AWS margin compression below 35.0%, fresh legal or impairment charges, and capex creeping past $200B.

Amazon guided Q2 2026 net sales of $194 to $199 billion, representing 16% to 19% growth year over year. Wall Street was expecting roughly $188 billion. That is a meaningful beat on the revenue guide.

Operating income guidance of $20 to $24 billion compares favorably to $19.2 billion in Q2 2025. The midpoint of $22 billion would represent roughly 15% year over year operating income growth, which is solid but not as dramatic as Q1’s outperformance.

Management also noted that Q2 guidance assumes Prime Day occurs in the second quarter this year. That is a notable detail that adds an incremental tailwind to the revenue line relative to last year when Prime Day fell in Q3.

The free cash flow picture remains the loudest concern. Trailing twelve month free cash flow has collapsed to just $1.2 billion as the company spent $147 billion on property and equipment over the same period. Andy Jassy will face pointed questions about this on the call

AWS grew 28% to $37.6 billion. That is the fastest growth rate in 15 quarters and an acceleration from 24% last quarter. Andy Jassy called it directly in the press release. For a business at $37.6 billion in quarterly revenue to be accelerating its growth rate is remarkable.

Operating income of $23.9 billion absolutely demolished the guidance range of $16.5 to $21.5 billion. Even at the top end of guidance the beat is $2.4 billion. That kind of operating income outperformance is not a rounding error.

Amazon’s chips business topped a $20 billion annual revenue run rate growing triple digits year over year. The OpenAI commitment to consume approximately two gigawatts of Trainium capacity starting in 2027 is a significant long term signal.

Advertising grew to over $70 billion in trailing twelve month revenue. That business grew 24% this quarter to $17.2 billion and is becoming an increasingly important profit driver alongside AWS.

Q2 guidance of $194 to $199 billion in revenue is a beat versus expectations and operating income guidance of $20 to $24 billion suggests the margin expansion story remains intact despite the aggressive capital spending.

Amazon is down 2.93% after hours despite what is objectively one of its strongest quarters in recent memory.

AWS grew 28% to $37.6 billion, the fastest pace in 15 quarters and an acceleration from last quarter’s 24%. Operating income of $23.9 billion blew past the top end of the $16.5 to $21.5 billion guidance range. Revenue of $181.5 billion topped the $177.2 billion estimate by more than $4 billion.

The pattern tonight is hard to ignore. All four of the biggest tech companies in the world just reported strong to excellent results and all four are trading lower after hours. The market came into tonight with shares up 28% to 31% over the past month across these names. The bar was simply very high.

For Amazon specifically, the concern heading into the conference call will be the same one that crushed the stock last quarter. Free cash flow has dropped to just $1.2 billion on a trailing twelve month basis as capital expenditure spending has surged 67% year over year to $147 billion. Andy Jassy committed to roughly $200 billion in capex this year and investors want to hear a credible ROI story.

Amazon  just reported Q1 2026 results. Here’s what the company delivered:

Revenue: $181.5 billion EPS: $2.78

Here’s what Wall Street was expecting:

Revenue: $177.2 billion EPS: $1.64

This is a strong beat across the board. Revenue topped estimates by more than $4 billion and EPS crushed expectations. The headline number is AWS, which grew 28% to $37.6 billion. That is the fastest AWS growth in 15 quarters and an acceleration from the 24% pace last quarter.

Andy Jassy also dropped a number that deserves attention. Amazon’s chips business, which includes Graviton, Trainium, and Nitro, has now exceeded a $20 billion annual revenue run rate growing triple digits year over year. OpenAI just committed to consume approximately two gigawatts of Trainium capacity through AWS starting in 2027.

Operating income came in at $23.9 billion, well above the high end of the $16.5 to $21.5 billion guidance range. Q2 guidance of $194 to $199 billion in revenue is also a beat versus expectations.

Shares are down 2.93% after hours. The market is in a punishing mood tonight across all four of these names despite uniformly strong results. The conference call starts at 5:30 p.m. ET.

Want to watch our team break down earnings from Alphabet, Amazon, Meta Platforms, Microsoft (and more) tonight? It’s the biggest earnings day of the year, and we’re live-streaming our analysis (in addition to more updates posted below on Amazon’s earnings!). Simply click the stream to watch our live analysis.

<iframe title=”YouTube video player” src=”https://www.youtube.com/embed/YN_TkOliPI8?si=LIR7JlSm-8LtMgMB” width=”560″ height=”315″ frameborder=”0″ allowfullscreen=”allowfullscreen”></iframe>

24/7 Wall St. Chief Investment Officer Eric Bleeker will be hosting the live stream. He also<a href=”https://podcast.247wallst.com/2400102″> hosts<em> </em>24/7 Wall St.’s AI Investor Podcast</a>, where the average recommendation is up more than 128% since late 2024. If you’d like to ask questions, you can also<a href=”https://www.youtube.com/watch?v=YN_TkOliPI8″> watch on YouTube</a>. Make sure to subscribe to 24/7 Wall St.’s YouTube channel if you’d like to be alerted when we host future live events!