• Earlier this month, Amazon CEO Andy Jassy’s latest shareholder letter revealed that AWS’s AI services have reached an annualized revenue run rate above US$15 billion, while Amazon’s custom chip business has doubled to more than US$20 billion, alongside plans for about US$200 billion of AI-focused capital expenditure in 2026.
• At the same time, Amazon Pharmacy’s new partnership with Eli Lilly to provide same-day delivery of the GLP‑1 pill Foundayo highlights how Amazon is pairing its cloud and chip investments with deeper moves into healthcare delivery.
• Against this backdrop, we’ll assess how Jassy’s emphasis on AWS’s US$15 billion AI run rate shapes Amazon’s existing investment narrative.

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Amazon.com Investment Narrative Recap

To own Amazon today, you need to believe its heavy AI and cloud spending will translate into durable, high‑margin AWS earnings while retail, ads and Prime keep supporting cash generation. Andy Jassy’s update that AWS AI services are running above a US$15 billion annualized rate and custom chips above US$20 billion helps underpin that thesis, but it does not remove the key near term risk that escalating AI and data center capex could pressure AWS margins if customer demand or pricing power disappoints.

The most relevant recent development here is management’s plan for about US$200 billion of AI focused capital expenditure in 2026, largely tied to AWS’s infrastructure build‑out. This sits squarely against the core catalyst of growing cloud and generative AI adoption, while sharpening the existing risk that rising capital intensity, power constraints and intensifying cloud competition could limit AWS earnings contribution if Amazon fails to maintain clear technological and commercial differentiation.

Yet even with AI revenues ramping, investors should still pay close attention to how this unprecedented capex could affect AWS profitability and overall returns…

Read the full narrative on Amazon.com (it’s free!)

Amazon.com’s narrative projects $1015.9 billion revenue and $129.1 billion earnings by 2029.

Uncover how Amazon.com’s forecasts yield a $281.27 fair value, a 18% upside to its current price.

Exploring Other Perspectives

Simply Wall St Community members have posted 117 fair value estimates for Amazon, ranging from US$200 to US$450 per share, underscoring how widely opinions can differ. Against that backdrop, Amazon’s planned US$200 billion in 2026 AI infrastructure spending highlights how much its future performance may hinge on AWS converting massive capex into resilient, profitable cloud and AI revenue, so it is worth exploring several contrasting views on what that could mean.

Explore 117 other fair value estimates on Amazon.com – why the stock might be worth as much as 89% more than the current price!

Decide For Yourself

Don’t just follow the ticker – dig into the data and build a conviction that’s truly your own.

• A great starting point for your Amazon.com research is our analysis highlighting 3 key rewards and 1 important warning sign that could impact your investment decision.
• Our free Amazon.com research report provides a comprehensive fundamental analysis summarized in a single visual – the Snowflake – making it easy to evaluate Amazon.com’s overall financial health at a glance.

No Opportunity In Amazon.com?

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This article by Simply Wall St is general in nature. We provide commentary based on historical data
and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your
financial situation. We aim to bring you long-term focused analysis driven by fundamental data.
Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
Simply Wall St has no position in any stocks mentioned.

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