-- CFRA, an independent research provider, has providedwith the following research alert. Analysts at CFRA have summarized their opinion as follows:
CEO Andy Jassy's annual letter highlighted Amazon's AI revenue run-rate surpassing $15B in Q1 2026, 260x larger than AWS at the same lifecycle stage, while the custom chip business reached a $20B annual run-rate (~$50B if chips was a standalone business) with triple-digit growth. Amazon is also the second-largest U.S. grocer with $150B in gross sales, with same-day perishables growing 40x since early 2025. Management emphasized that much of the planned ~$200B capex is backed by customer commitments (e.g., $100B+ from OpenAI) and will be monetized in 2027-2028, reinforcing expectations of attractive returns. Amazon Leo is set to launch mid-2026, though the company is already generating meaningful revenue ahead of the formal rollout. While long-term demand signals remain constructive, we believe investors will continue scrutinizing the return profile of these investments, particularly as Amazon potentially turns FCF-negative this year, though we expect the significant investments to pay off over the long term.