- Leverage & Inverse ETPs
- Instruments
- Why Us
Your capital is at risk if you invest. You could lose all your investment. Please see the full risk warning here.
Amazon’s latest earnings report delivered stronger revenue, sharply higher profits, and a meaningful reacceleration in Amazon Web Services (AWS), which is the company’s most important business.
The numbers were impressive. Amazon comfortably beat Wall Street expectations on both the top and bottom lines, while AWS posted its fastest growth in more than three years. For a market focused on whether hyperscalers can justify their enormous artificial intelligence investments, this quarter offered a reminder that Amazon’s AI and cloud machine is not only expanding but is also accelerating. 1
AWS revenue growth was the standout. Cloud sales surged well ahead of expectations, reinforcing Amazon’s position as one of the clearest beneficiaries of enterprise AI demand. At a time when investors have been scrutinizing whether Big Tech’s infrastructure spending is translating into real commercial returns, Amazon provided one of the strongest answers yet.
The quarterly earnings provided a validation that Amazon’s AI infrastructure strategy is beginning to produce visible operating momentum.
While e-commerce remains Amazon’s largest revenue engine, the company’s latest quarter highlighted a broader transformation.
AWS remains the crown jewel, but Amazon’s in-house chips business, including Trainium and Graviton, is emerging as an important AI monetization lever. 2 Amazon is not content with merely renting out cloud capacity, it wants to own more of the AI value chain, from infrastructure to silicon.
This is important because custom chips could significantly improve Amazon’s economics over time, particularly as AI workloads become more compute-intensive and global demand for hardware continues to surge.
At the same time, Amazon’s advertising division quietly continues to transform into one of its most profitable and fastest-growing businesses. Advertising growth once again exceeded expectations, highlighting that Amazon is becoming a diversified high-margin ecosystem spanning commerce, cloud, enterprise AI, and digital ads.
This diversification gives Amazon something investors value in the AI era: multiple monetization engines.
Despite the strong quarter, Amazon’s report also reinforced the same critical tension facing nearly every major technology company: AI leadership is proving enormously expensive.
Capital expenditures and infrastructure spending continue to surge as Amazon races to build more data centres, expand AWS capacity, develop satellite infrastructure through Leo, and deepen its AI partnerships with companies such as OpenAI, Anthropic, and Meta.
This spending comes at a big financial cost. Free cash flow plunged dramatically as Amazon poured capital into property, equipment, and next-generation infrastructure.
Amazon is clearly capturing AI demand, but the question is how long will it take for that demand to fully offset the scale of spending required to support it? Investors are no longer focused solely on whether Amazon can grow, they are focused on whether Amazon can scale AI profitably without compromising free cash flow.
Perhaps one of the most encouraging signals from Amazon’s report was its forward guidance.
Second-quarter sales projections came in well above Wall Street expectations, suggesting management remains confident that both consumer demand and enterprise cloud momentum remain strong despite broader macro concerns, including oil price volatility, geopolitical uncertainty, and supply chain disruption.
That confidence is important given the current market backdrop. With investors sensitive to rising infrastructure costs and potential economic slowing, Amazon’s willingness to guide aggressively higher signals that management still sees powerful demand across both retail and enterprise channels.
Overall, Amazon is spending heavily because it believes this is a once-in-a-generation platform shift.
From a technical analysis perspective, Amazon share price rallied from its March low of $199.14 to a fresh record high of $278.56 on the 5th of May, pushing the Relative Strength Index (RSI) indicator into overbought territory. While the long-term outlook remains positive and see levels towards $310 as achievable, given the overbought momentum conditions the share price is likely to retreat in the short-term. Such potential short-term share price weakness would present a buying opportunity.
Source: TradingView. Amazon daily price chart as of 07 May 2026.
Amazon’s quarter was, by almost every operational measure, a success.
Revenue beat. Earnings beat. AWS beat. Advertising beat. Guidance beat.
Yet the broader market reality is that in today’s environment, beating estimates is no longer enough on its own. Investors increasingly want to know whether Big Tech’s AI spending boom will create lasting shareholder value or simply bigger infrastructure bills.
For now, Amazon appears to be making a persuasive case that its spending is translating into real demand.
The company is proving it can still dominate commerce while simultaneously scaling one of the world’s most important AI and cloud ecosystems.
That is a powerful combination, but one that will continue to be judged not only by growth, but by the efficiency of that growth.
Professional investors looking for magnified exposure to Amazon may consider Leverage Shares +3x Long Amazon or -3x Short Amazon ETPs.
Footnotes:
Websim is the retail division of Intermonte, the primary intermediary of the Italian stock exchange for institutional investors. Leverage Shares often features in its speculative analysis based on macros/fundamentals. However, the information is published in Italian. To provide better information for our non-Italian investors, we bring to you a quick translation of the analysis they present to Italian retail investors. To ensure rapid delivery, text in the charts will not be translated. The views expressed here are of Websim. Leverage Shares in no way endorses these views. If you are unsure about the suitability of an investment, please seek financial advice. View the original at
Your capital is at risk if you invest. You could lose all your investment. Please see the full risk warning here.
Share this:
INVESTOR TYPE:
LOCATION:
Never miss out on important announcements. Get premium content ahead of the crowd. Enjoy exclusive insights via the newsletter only.
