Amazon.com is set to release its first-quarter financial results on Wednesday, alongside competitors Alphabet, Meta Platforms, Inc., and Microsoft. Investors are closely watching to see if its massive artificial intelligence investments are beginning to yield returns.
Overall, capital expenditures for major hyperscale cloud providers are projected to reach $650 billion in 2026, with Amazon.com alone accounting for $200 billion of that total.
Despite the substantial costs associated with AI investments, Wall Street remains broadly optimistic about Amazon.com. The e-commerce and cloud computing giant's stock has climbed 13% year-to-date, outperforming Alphabet's 12% gain and significantly surpassing Microsoft's 12% decline.
Concurrently, Amazon.com is facing pressure from rising logistics and delivery costs due to increasing fuel prices, which could negatively impact revenue from its e-commerce segment this quarter.
Brian Nowak, an analyst at Morgan Stanley, indicated that even accounting for fuel surcharges, persistently high fuel costs could, in a worst-case scenario, pressure Amazon.com's profits by up to $4 billion. Under a baseline forecast, the company is expected to incur $600 million in additional costs in the first quarter and $2 billion in the second quarter. It is anticipated that Amazon.com will be able to offset these cost pressures through other means in the latter half of the year.
Bloomberg consensus estimates project Amazon.com's first-quarter earnings per share at $1.62, with total revenue reaching $177.2 billion. In the same quarter last year, the company reported earnings per share of $1.59 on revenue of $155.6 billion.
Revenue from the e-commerce segment is forecast to reach $62.65 billion. Advertising revenue is expected to be $16.89 billion, representing a 21% year-over-year increase.
Revenue from Amazon Web Services (AWS) is projected to be $36.79 billion, a 25% increase compared to the previous year.
Investors will be paying particular attention to Amazon.com's Remaining Performance Obligation (RPO), which represents the value of contracted services not yet recognized as revenue.
In the fourth quarter of last year, Amazon.com disclosed an RPO of $244 billion. This metric provides Wall Street with direct insight into the market demand for AWS and its service delivery capacity.
Earlier this month, CEO Andy Jassy revealed in the annual shareholder letter that the annualized revenue run rate for AWS's AI business had surpassed $15 billion by the first quarter of 2026 and continues to grow. He also noted that the business could be growing even faster but is currently constrained by computing capacity. Despite adding 3.9 gigawatts of capacity in 2025, the company plans to double its computing scale again by 2027.
Amazon.com's custom chip business is increasingly becoming a critical component within the AWS ecosystem.
Jassy mentioned that the company is considering selling its proprietary processors directly to external customers, rather than solely utilizing them within its computing rental model.
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