AMZN changes
Pick any two versions below to diff them.
- Price
- $249.15 → $262.43(+5.3%)
- About
- Amazon runs removed: two added: three main businesses. The first is online removed: retail. added: retail in North America and in other countries. Amazon sells products directly to customers, and it lets other sellers list products on its site for a fee. added: In Q2 2026, Amazon's online stores had sales of $70.4 billion, and fees from other sellers were $46.8 billion. The second business is Amazon Web Services, or AWS. AWS rents cloud computing, removed: storage, added: storage and AI infrastructure to other removed: companies. added: companies, and it designs its own chips, Graviton and Trainium. In Q2 2026, AWS removed: produces most added: had sales of added: $42.2 billion and operating income of $16.6 billion. This was more than half of Amazon's removed: profit. added: total operating income of $27.5 billion. The third business is advertising, mostly sponsored product ads in Amazon's store. Advertising sales were $19.8 billion in Q2 2026, 26% more than a year earlier. Amazon also sells Prime subscriptions. It is building Amazon Leo, a satellite internet service, and Zoox, a robotaxi service. It holds large stakes in two AI companies, Anthropic and OpenAI.
- Thesis
- The market discounts Amazon mainly because of its record AI spending. Amazon added: now plans removed: to spend about $220 billion added: of cash capital spending in removed: 2026 on AI data centers and chips. added: 2026, up from about $200 billion in its February plan. This spending removed: pushed added: made free cash flow removed: negative. added: negative over the 12 months to June 30, 2026, and Amazon now borrows to pay for it. Investors fear added: that the removed: spending added: new data centers will not earn a strong return quickly. removed: They added: Large non-cash gains on the Anthropic stake also removed: worry that pending added: make net income hard to read: they were most of the $53.4 billion of non-operating income in Q2 2026. Two antitrust cases removed: could force costly changes to added: add a second fear, because they target the marketplace and the ad auctions, two of Amazon's most profitable removed: businesses, its ad auctions and its marketplace. added: businesses. For the gap to close, AWS removed: operating margins must removed: keep expanding. The large added: turn its $496 billion backlog removed: of signed cloud contracts must also keep converting into removed: revenue. added: revenue at high margins. AWS added: growth rose from 28% in Q1 2026 to 37% in Q2, and its operating margin removed: already reached 39.4% in Q2 2026, up added: rose from removed: about 33% a year earlier. Its contract backlog jumped by $132 billion in one quarter, added: 37.8% to removed: $496 billion. This shows real demand already exists for added: 39.3%. AWS growth must stay near this level, and free cash flow must turn positive when the removed: new capacity. A new FTC advertising lawsuit, filed in August 2026, adds added: spending growth slows. The antitrust cases must also end without forced changes to removed: an existing FTC added: the marketplace removed: monopoly case set for trial in 2027. Neither case will resolve quickly. Amazon is expected to report added: or the ad business. The Q3 2026 removed: results on added: report, expected about October 29, removed: 2026. That added: 2026, and the Q4 report removed: should show whether added: in early 2027, with the 2027 spending plan, are the next tests. The FTC marketplace trial starts on March 29, 2027. If AWS added: keeps its growth and margins and removed: backlog conversion keep improving. If they do, and added: free cash flow starts to recover, the removed: antitrust cases do not force major business changes before their 2027 trial dates, the discount can close over the next four to six quarters.
- Risks
- removed: Amazon's free cash flow turned negative in 2026 because added: Amazon plans about $220 billion of removed: heavy AI added: cash capital removed: spending. Full-year capital spending removed: guidance is now about $220 billion. added: in 2026, mostly for AI data centers and chips. Free cash flow was an outflow of $7.6 billion for the 12 months to June 30, 2026. Since then, Amazon has borrowed more and paid $21.3 billion to OpenAI. If AI demand grows slower than planned, added: or AI computing prices fall, this spending will not earn the expected removed: return. The FTC added: return, and removed: 22 states sued added: the debt will stay. Amazon removed: in August 2026 over its advertising auction practices. Amazon also faces removed: a separate added: two FTC added: cases. The marketplace monopoly case removed: against its marketplace, set for added: goes to trial removed: in added: on March 29, 2027. added: The ad auction case, filed on August 31, 2026, says that Amazon took tens of billions of dollars from advertisers. A loss in either case could force changes to added: the marketplace or to the ad business, two of Amazon's most profitable removed: businesses. The FTC added: businesses, and removed: 22 states sued Amazon in August added: could bring large payments. A large part of AWS's future AI revenue comes from two customers, Anthropic and OpenAI. In 2026, removed: alleging it overcharged advertisers added: OpenAI added $100.0 billion over 8 years to its AWS commitment, and Anthropic added more than removed: $20 added: $100.0 billion removed: since 2019 by secretly overriding its stated second-price ad auctions. This added: over 10 years. AWS's total backlog was $496 billion at June 30, 2026. The risk in current revenue is removed: separate from added: smaller. Press reports said that the removed: existing FTC marketplace monopoly case added: AWS CEO gave the share of AWS revenue from its largest customer as a single-digit percentage. Amazon also owns large stakes in both companies. At June 30, 2026, its stakes in private companies had a value of $122.3 billion, mostly Anthropic and removed: adds legal risk added: OpenAI preferred stock. These values are estimates and can change quickly. A fall in Anthropic's value would cause large losses in net income. A slowdown at either company would hurt AWS revenue at the same time. AWS grows slower than its two main rivals. In the quarter to removed: Amazon's advertising business specifically. Amazon's added: June 30, 2026, AWS grew 37%, Microsoft Azure 43% and Google Cloud 82%. AWS keeps losing share of the cloud market while this continues. Microsoft and Google also sell their own AI removed: capacity growth added: models, and AWS depends removed: partly added: more on removed: a small number added: outside models. The retail business has thin margins. In Q2 2026, the operating margin was 7.8% in North America and 4.0% in other countries. Weaker consumers, tariffs or higher delivery costs can remove much of removed: large partners, including Anthropic, which added: that profit. Customers have also sued Amazon removed: has invested billions added: about refunds of removed: dollars in. If a large partner's growth slows, or added: tariffs that it removed: shifts spending to another cloud provider, AWS's return added: passed on added: in its removed: new capacity added: prices. New businesses need large amounts of money before they earn a profit. Amazon Leo must have half of its satellites in orbit by July 30, 2028, under its FCC license. Amazon also pays about $11.6 billion for Globalstar and builds the Zoox robotaxi service. In Europe, a gatekeeper decision on AWS under the Digital Markets Act would removed: suffer. added: add rules to how AWS deals with customers.
- Balance sheet
- added: Cash: $123.0B Debt: $133.0B Net debt: $10.0B Interest cover: 24× Ratings: S&P AA, Fitch AA-, Moody's A1 (stable outlook) Amazon now borrows to pay for AI data centers, and large stakes in AI companies sit on its balance sheet. removed: At added: While free cash flow stays negative, each new step of AI spending needs more borrowing until the new capacity earns revenue. Debt is the face value of long-term debt at June 30, 2026, added: up from $68.8 billion at December 31, 2025. Most of it removed: had added: was $132.1 billion of unsecured senior notes at the parent. removed: This is up from $68.8 billion face value of long-term debt at December 31, 2025. It added: Amazon also had $109.8 billion of operating and finance lease liabilities and $9.3 billion of financing obligations. removed: Against this, it had $123.0 billion of cash and added: Cash includes marketable securities. Free cash flow was negative $7.6 billion for the 12 months to June 30, 2026. Purchases of property and equipment of $169.0 billion, net of proceeds and incentives, used more than all of the $161.4 billion operating cash flow. removed: Operating income of $51.3 billion in added: Interest cover is for the first half of removed: 2026 covered interest expense of $2.1 billion about 24 times. added: 2026. The removed: $20.0 billion of revolving credit removed: facilities and added: facilities, the removed: $30.0 billion commercial paper programs added: and a $17.5 billion term loan signed in June 2026 were undrawn. removed: The ratings are AA at S&P, AA- at Fitch added: After June 30, Amazon sold $25.0 billion of notes on July 9 and removed: A1 at Moody's. added: £4.25 billion of notes on September 14, and it paid the last $21.3 billion of its OpenAI investment. In February 2026, Moody's moved its outlook back to stable because of higher capital spending. Amazon also holds $122.3 billion of private equity stakes, mostly Anthropic and OpenAI preferred stock. removed: These stakes added: The Anthropic stake added large non-cash gains to profit. Anthropic can still ask Amazon to lend up to $15.0 billion under a financing facility. The debt is affordable. removed: But while free cash flow stays negative, each new step of AI spending needs more borrowing until the new capacity earns revenue. As of Jun 30, 2026.
- Checkpoints
- Oct 29, 2026 (estimate): Q3 2026 results: AWS added: growth, margin and removed: backlog conversion. added: backlog. Pending. Watch: AWS removed: operating margin added: growth near removed: or above the Q2 level of removed: 39.4% added: 37%, an operating margin near or above 39.3%, and added: a backlog that keeps removed: turning into revenue added: growing pass; a margin drop or a stall in AWS growth fails. added: Nov 2026 (estimate): EU decision on AWS as a Digital Markets Act gatekeeper. Pending. Watch: No designation, or a designation with rules that do not change AWS pricing, passes; rules that force large changes to AWS contracts or prices fail. Dec 2026 (estimate): Amazon Leo starts initial internet service. Pending. Watch: Initial paid service for customers in 2026, as Amazon said in July, passes; a delay into 2027 fails. Feb 2027 (estimate): Q4 2026 results and 2027 capital spending plan. Pending. Watch: Free cash flow that turns toward positive with steady AWS growth passes; a larger 2027 capex plan with still negative free cash flow fails. Mar 29, 2027: FTC marketplace monopoly trial starts in Seattle. Pending. Watch: A settlement or trial progress with no forced change to the marketplace or fees passes; a ruling or settlement that forces large business changes fails.
- Recent events
- added: Oct 9, 2026: Judge John Chun refused Amazon's request to move the FTC marketplace monopoly trial to June 2027. The trial stays set for March 29, 2027, in Seattle. Oct 8, 2026: AWS CEO Matt Garman said on the a16z podcast that AWS does not put all of its capacity into one customer. Press reports said that he also gave the share of AWS revenue from its largest customer as a single-digit percentage. The reports did not name the largest customer. Amazon does not report revenue by customer. Oct 7, 2026: Amazon confirmed a small number of job cuts, mainly in its Stores business. Reuters reported, from an unnamed source, that the cuts were fewer than 1,000 jobs. In January 2026, Amazon cut about 16,000 corporate jobs. Oct 2, 2026: The Financial Times reported that Amazon is in talks to move about $8 billion of Nvidia chips into a separate company, paid for with debt, and lease them back. This is a press report only. Amazon did not comment, and no deal is agreed. Sep 30, 2026: Amazon and Synopsys signed a multi-year removed: deal worth more than $1 billion. Synopsys will supply added: agreement for chip design technology for Amazon's removed: Trainium, Graviton and Nitro added: own chips. removed: Amazon pays a license fee plus royalties that grow with added: Synopsys says the agreement is worth more than $1 billion. It also covers cloud and AI tools for chip removed: volume. added: engineering. Sep removed: 1, added: 14, 2026: Amazon removed: continued cutting jobs added: sold £4.25 billion of sterling notes in removed: 2026, including corporate technology and fulfillment roles added: four parts, due from 2029 to 2045, with interest rates from 5.200% to 6.650%. In July, press reports said that Amazon planned no more bond sales in removed: Washington state, after eliminating about 16,000 corporate positions worldwide in January 2026 as part added: 2026. Sep 8, 2026: The board elected Kevin Mandia, the founder of removed: its shift toward AI. added: the security company Mandiant, as a director. He joined the Audit Committee and the Security Committee. Aug 31, 2026: The FTC and 22 states sued Amazon added: in Seattle over its removed: advertising auction practices. added: sponsored ad auctions. The removed: lawsuit added: complaint says removed: Amazon hid surcharges that removed: turned second-price added: Amazon added a secret surcharge to the auctions removed: into first-price auctions. added: for more than seven years. The FTC says that Amazon likely took tens of billions of dollars from advertisers. Amazon denied wrongdoing. Aug removed: 31, added: 18, 2026: The removed: FTC and 22 states sued added: SEC registration for Amazon's purchase of Globalstar became effective. Amazon added: agreed in removed: Seattle, saying it overcharged advertisers by more than $20 added: April 2026 to buy Globalstar for $90 per share in cash or Amazon stock, about $11.6 billion removed: since 2019 by secretly overriding its second-price ad auctions with higher, undisclosed prices. added: in total, for Amazon removed: denied wrongdoing and said added: Leo. Amazon expects to close the purchase in 2027. Aug 12, 2026: Zoox started to charge riders for its removed: auctions lower advertiser costs. added: robotaxi service in Las Vegas, after a federal safety exemption on July 30, 2026. Jul 30, 2026: Amazon reported Q2 2026 results. Revenue was $200.6 billion, removed: up 20% added: more than a year earlier. Operating income was $27.5 billion, up from removed: last year. added: $19.2 billion. Net income was $62.6 billion, or $5.75 per share, because it included $53.4 billion of non-operating income before tax, mostly from the Anthropic stake. Jul 30, 2026: In Q2 2026, AWS revenue grew 37%, to $42.2 added: billion, and AWS operating margin was 39.3%, up from 33.0% a year earlier. The AWS backlog was $496 billion, about $132 billion more than at the end of Q1. North America operating margin was 7.8%, and International operating margin was 4.0%. Jul 30, 2026: Amazon raised its 2026 plan for cash capital spending to about $220 billion, from about $200 billion. added: The CEO said that AWS will still not have enough capacity for all the demand in 2026, and that Amazon expects to double its 2025 power capacity by the end of 2027. For Q3 2026, Amazon guided revenue of $197 billion to $202 billion and operating income of $22.5 billion to $26.5 billion. Jul 9, 2026: Amazon sold $25.0 billion of notes in eight parts, due from 2029 to 2066. In 2026 it also sold $37.0 billion of notes in March, €14.5 billion in March and C$14.0 billion in June, and it signed a $17.5 billion term loan in June. Jul 2, 2026: An Atlas V rocket launched 29 Amazon Leo satellites. Amazon said it has enough satellites in orbit to start initial internet service later in 2026. Jun 25, 2026: The European Commission said in a preliminary view that AWS should be a gatekeeper under the Digital Markets Act. A gatekeeper must follow extra rules on how it treats customers and rivals. Apr 20, 2026: Amazon invested $5 billion more in Anthropic and agreed to invest up to $20 billion more if Anthropic meets milestones. Anthropic agreed to spend more than $100 billion on AWS over 10 years. Feb 27, 2026: Amazon agreed to invest $50 billion in OpenAI, and OpenAI expanded its AWS contract by $100 billion over 8 years. Amazon paid the last $21.3 billion of the investment after June 30, 2026.