Amazon Guides $200B AWS Capex, Stock Trades at 26.8x Forward P/E
Amazon.com is trading at $212 per share, down 14% since the last coverage, while AWS capex guidance jumped to $200 billion for 2026 reflecting accelerating cloud demand. At a forward P/E of 26.8x, Amazon’s custom silicon (Trainium) and partnerships with Anthropic and OpenAI underpin potential upside despite recent underperformance.
1. Stock Performance and Valuation
Amazon.com shares have fallen 14% to $212 since the last analyst update, reflecting investor concerns over heavy reinvestment. At 26.8 times forward earnings, the stock sits below its five-year average multiple, suggesting valuation support if growth prospects materialize.
2. Increased AWS Capex Guidance
Management raised AWS capital expenditure targets to $200 billion for fiscal 2026, up significantly from previous guidance, citing robust demand for cloud infrastructure. This record capex is earmarked for data center expansion, custom chip deployment and network upgrades globally.
3. AI Partnerships and Custom Silicon
Amazon is deepening ties with AI leaders Anthropic and OpenAI to drive AWS usage, while deploying its Trainium chips for machine learning workloads. These initiatives aim to reduce external GPU costs, enhance performance and capture greater share of the growing AI cloud market.