Amazon Targets $200B AI Capex, Q1 EPS $1.62 on $177.2B Revenue
Amazon plans $200B of AI infrastructure capex in 2026 as it targets 25% growth in AWS, and is expected to report Q1 EPS of $1.62 on $177.2B revenue, with e-commerce sales of $62.65B and advertising up 21%. Rising fuel costs could impose a $4B headwind this quarter.
1. Q1 Earnings Forecast
Amazon is set to report first-quarter earnings with analysts projecting EPS of $1.62 on revenue of $177.2 billion, marking a 14% year-over-year sales increase. AWS revenue is expected to grow 25% to $36.79 billion, while e-commerce and advertising segments are forecast at $62.65 billion and $16.89 billion, respectively.
2. 2026 AI Capex Plans
The company plans to invest $200 billion in AI and data-center infrastructure during 2026, accounting for nearly one-third of the projected $650 billion industry capex among major cloud providers. This step-up follows a record $200 billion-plus increase in 2025 and aims to support capacity expansion and AI service growth.
3. Segment Drivers and Cost Headwinds
Amazon’s ad business is forecast to grow 21% year-over-year, driven by broader platform usage and new ad products. However, rising fuel prices pose a potential $4 billion drag on shipping costs in the first half, with Morgan Stanley estimating up to $600 million in Q1 and $2 billion in Q2 headwinds, partially offset later in the year.