Amazon.com Inc. (AMZN) reported first-quarter adjusted earnings per share of $1.42 on Wednesday after the close, beating the $1.30 consensus, but the print was overshadowed by an AWS deceleration and a capex guide that surprised even the most bullish AI hyperscaler estimates. Total revenue of $156.4 billion modestly topped the $155.2 billion estimate; the North America retail and International retail segments both delivered above consensus.
Amazon Web Services delivered $30.8 billion of revenue, up 18% year-on-year — the slowest growth rate in five quarters and below the 21% consensus. Operating margin in AWS contracted to 35.6% from 39.5% a year ago, weighed down by the depreciation step-up from the AI capex cycle. CEO Andy Jassy attributed the deceleration partly to "lumpy enterprise commit timing that should reverse in Q2" but acknowledged that "supply constraints in higher-end accelerator capacity remain a binding limiter on top-line growth."
Capex Goes to $115 Billion
CFO Brian Olsavsky raised the full-year 2026 capex guidance to $110-$120 billion (midpoint $115 billion) from the prior $90-$95 billion, citing "an acceleration of Trainium and Inferentia silicon-build commitments and a meaningful step-up in datacenter shell construction in the U.S. South and Pacific Northwest." That figure represents 84% growth over 2025 capex of $62.6 billion. Olsavsky added that the company expects 2027 capex to "decelerate as a percentage of revenue but remain higher in absolute terms."
Retail performed well: North America revenue grew 9% to $94.0 billion with operating margin of 6.4%, while International grew 11% to $36.4 billion with margin of 3.6%. Amazon Prime grew to 248 million paid members globally (vs. 230 million a year ago). Advertising services revenue jumped 22% to $14.1 billion, the third consecutive quarter of 20%+ growth, driven by Sponsored Products and ad insertion in Prime Video.
Stock Reaction
Amazon shares fell 4.1% in extended trade to $211.40 as investors digested the AWS deceleration and the magnitude of the capex guide. The contrast with Microsoft and Alphabet — both of which delivered cloud reaccelerations — was stark. Datacenter and power-supply names trimmed Microsoft-driven gains: Vertiv (