Financial Report Outlook | AWS and advertising business become growth "twin engines" Amazon.com, Inc. (AMZN.US) Q1 performance expected to be a catalyst for stock price increase.

Amazon.com, Inc. (AMZN.US) will announce its first quarter performance for 2026 after the US stock market closes on Wednesday (Thursday morning Beijing time). Wall Street analysts currently expect that, driven by the accelerated expansion of the cloud computing business (AWS) and strong growth in the advertising business, Amazon.com, Inc.'s first quarter revenue will increase by 13% year-on-year to $177.2 billion, with adjusted earnings per share increasing to $1.63. Fourth quarter performance review In early February, Amazon.com, Inc. released its fourth quarter financial report for 2025, showing that, thanks to strong growth in AWS (revenue up 24%) and advertising business (revenue up 23%), the quarterly revenue exceeded market expectations. Despite a slight improvement in the profit margin of the retail business, net profit increased by 6% year-on-year to $21.192 billion, with earnings per share of $1.95, slightly below market expectations. It is worth noting that in the fourth quarter financial report, Amazon.com, Inc. announced that capital expenditures for 2026 will reach a record $200 billion, an increase of 60% from 2025. The majority of these funds will be allocated to artificial intelligence (AI) infrastructure, including data center expansion, in-house chip development, and high-speed network equipment deployment. However, this aggressive capital expenditure plan has raised concerns among some investors. Doubts about whether such a large-scale AI investment can bring returns in the short term, as well as anxiety about the capital expenditure return cycle, have led to a weak performance in Amazon.com, Inc.'s stock price in February - the stock has fallen by over 12% cumulatively in February. AWS demonstrating strong growth momentum As the demand for generative AI infrastructure continues to grow, enterprise spending on cloud services for large-scale training and inference is rising, propelling AWS into accelerated growth. Its dedicated AI chip series Trainium and Inferentia are gradually being commercialized, which will enhance AWS's competitiveness in the global cloud market and narrow the gap with Microsoft Corporation's Azure and Alphabet Inc. Class C's cloud offerings. Amazon.com, Inc. CEO Andy Jassy revealed in a shareholder letter for 2025 that AWS added 3.9 gigawatts of...