Thesis check
strengthening$243.79 -4.2% today
“Amazon's AI capex spree pays off through AWS reacceleration”
Bull case
- AWS revenue up 39% to $45.98 billion with $17.77 billion in segment operating income
- Jassy guiding AWS growth above 40% in both 2027 and 2028 off a $184 billion run rate
- Company-wide operating margin of 13.9%, its highest ever
- North America operating income nearly doubled to $8.72 billion from $4.79 billion
Bear case
- EPS of 1.89 and revenue of $201.94 billion both missed estimates
- Trailing twelve-month free cash outflow of $42.4 billion with 2026 capex near $220 billion
- Rising debt and interest expense as the build-out scales
- Memory chip supply volatility threatens capacity timing
The AWS acceleration analysts pressed for on every recent call showed up, and the over-40% growth projection for 2027 and 2028 is what tips this today, even with a double miss and the stock down 4.2%. The thesis breaks if the $220 billion capex year arrives without AWS holding that growth rate.
