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AMZN's AWS growth, AI push and OpenAI deal are key drivers, with revenues seen up 25.6%.
Advertising, Prime and e-commerce gains are offset by tariff costs and heavy capex plans.
Amazon (AMZN - Free Report) is scheduled to report first-quarter 2026 results on April 29.
For the first quarter, the company anticipates net sales between $173.5 billion and $178.5 billion, implying 11% to 15% growth compared to the first quarter of 2025, with this guidance anticipating a favorable impact of approximately 180 basis points from foreign exchange rates.
The Zacks Consensus Estimate for net sales is pegged at $177.84 billion, indicating growth of 14.24% from the prior-year quarter’s reported figure. The company has been benefiting from its dominant position in the e-commerce and cloud markets. It is also riding on strengthening generative AI capabilities.
The Zacks Consensus Estimate for first-quarter earnings is pegged at $1.61 per share, reflecting a downward revision of 0.6% over the past 30 days. Management's prior indication that a substantial portion of 2026 AWS capacity is already underwritten by customer commitments should temper near-term concerns.
Image Source: Zacks Investment Research
AMZN’s Earnings Surprise History
Amazon has a mixed earnings surprise history. In the last reported quarter, the company delivered a negative earnings surprise of 1.52%. The company’s earnings beat the Zacks Consensus Estimate in three of the trailing four quarters while missing the same once, the average surprise being 16.5%.
Our proven model predicts an earnings beat for Amazon this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.
As Amazon is set to report its first-quarter 2026 earnings, multiple catalysts positioned the company for solid performance across its diversified business segments, while elevated capital spending, tariff-driven pricing pressures, and rising satellite and quick-commerce investments are likely to have weighed on near-term margins. Strategic initiatives in cloud computing, advertising and e-commerce are expected to have supported top-line growth within management's guided range.
AWS and AI Infrastructure Momentum
Amazon Web Services ("AWS") is likely to have sustained its reaccelerating trajectory in the first quarter, following 24% year-over-year growth in the fourth quarter of 2025 to $35.6 billion. The Zacks Consensus Estimate for first-quarter AWS revenues indicates 25.6% year-over-year growth to $36.75 billion. The strategic partnership announced on March 2, 2026, under which Amazon committed up to $50 billion in OpenAI and made AWS the exclusive third-party cloud distributor for OpenAI Frontier, is likely to have strengthened the segment's positioning against rivals like Microsoft (MSFT - Free Report) , Alphabet (GOOGL - Free Report) and Oracle (ORCL - Free Report) . Continued Trainium2 deployment within Project Rainier, the rollout of Trainium3 capacity and a disclosed AI annualized run rate of approximately $15 billion supported momentum. The Jan. 15 general availability of the AWS European Sovereign Cloud broadened reach in regulated industries. However, the scale of the announced $200 billion 2026 capital outlay continued to pressure free-cash-flow expectations and depreciation trajectory.
E-Commerce, Prime and Logistics Strength
The online stores segment is likely to have gained from expanded same-day delivery infrastructure, AI-powered shopping features and continued perishable-grocery momentum. The Zacks Consensus Estimate for online stores is pegged at $62.77 billion, indicating 9.3% year-over-year growth, while subscription-services revenues are projected at $12.92 billion, up 10.3%. The Feb. 11 announcement to expand same-day pharmacy delivery to nearly 4,500 cities by year-end and the launch of Amazon One Medical's weight-management program, integrating GLP-1 treatments, broadened the healthcare offering.
Amazon's physical retail operations are expected to show healthy growth, with the Zacks Consensus Estimate projecting physical store sales of $5.82 billion, indicating a 5.3% year-over-year increase.
However, the company acknowledged that tariff-related cost pressures had begun filtering into retail prices, with third-party sellers increasingly passing through higher costs to consumers.
Third-party seller services remain a significant growth driver with the Zacks Consensus Estimate pegged at $40.7 billion, indicating an 11.6% year-over-year increase.
International segment performance is likely to have benefited from the foreign-exchange tailwind, partially offset by sharper pricing investments in select international stores.
Advertising Services
Advertising services are likely to have sustained robust expansion, with the Zacks Consensus Estimate projecting $16.97 billion, indicating 21.9% year-over-year growth. The integration of the Demand-Side Platform and Sponsored Ads into a unified, AI-assisted workflow, along with Prime Video ad-tier monetization and ongoing partnerships with Netflix, Spotify and SiriusXM, supported scale. Nevertheless, softening brand spending in a tariff-impacted consumer environment and tougher year-over-year comparisons against the fourth quarter's 23% advertising growth pace might have moderated the trajectory in the to-be-reported quarter.
Margin and Capex Considerations
Operating income is expected within management's guided range of $16.5-$21.5 billion compared with $18.4 billion in first-quarter 2025. The wide band reflects approximately $1 billion of incremental Amazon Leo satellite-deployment costs as the constellation scaled, accelerated investment in quick-commerce capabilities, and sharper international pricing. AWS margin expansion, supported by Trainium-driven efficiencies and a rising mix of higher-margin AI workloads, remains the principal offset. The North America segment is expected to deliver $101.89 billion, up 9.7%, with operating leverage tied to fulfillment-network productivity. Backlog disclosures and management commentary on AI-capacity absorption are likely to have remained focal points for investors evaluating the elevated 2026 capital program.
AMZN Price Performance & Stock Valuation
Shares of Amazon have gained 14.6% in the past six-month period compared with the broader Zacks Retail-Wholesale sector and the S&P 500 index’s return of 5.8% and 5.2%, respectively.
AMZN’s 6-Month Performance
Image Source: Zacks Investment Research
Now, let’s look at the value Amazon offers investors at current levels. AMZN is trading at a premium with a forward 12-month P/S of 3.39X compared with the Zacks Internet - Commerce industry’s 2.16X, reflecting a stretched valuation.
AMZN’s P/S F12M Ratio Depicts Stretched Valuation
Image Source: Zacks Investment Research
Investment Thesis
Amazon's first-quarter 2026 setup looks compelling, with AWS reaccelerating toward a projected 25.6% growth, the transformative $50 billion OpenAI partnership reinforcing cloud leadership, and advertising services sustaining 21.9% expansion. Same-day pharmacy expansion, One Medical's GLP-1 program, and Trainium-driven AI efficiencies underscore durable competitive advantages. While the $200 billion capex plan, incremental Leo satellite costs, tariff-related pricing pressures and intensifying cloud competition warrant attention, long-term fundamentals remain robust as customer commitments reportedly underwrite much of the spend. Given the premium valuation and recent EPS revisions, investors should hold, while prospective buyers may await a better post-earnings entry.
Conclusion
Amazon enters its first-quarter 2026 results with AWS momentum, expanding AI partnerships and steady advertising growth, balanced against elevated capex, satellite-related costs, tariff pressures and intensifying cloud competition from Microsoft, Alphabet and Oracle, among others. Given the premium valuation and recent downward EPS estimate revisions, existing investors may continue to hold, while prospective buyers should await a more attractive post-earnings entry point.
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Should You Buy, Sell or Hold Amazon Stock Before Q1 Earnings?
Key Takeaways
Amazon (AMZN - Free Report) is scheduled to report first-quarter 2026 results on April 29.
For the first quarter, the company anticipates net sales between $173.5 billion and $178.5 billion, implying 11% to 15% growth compared to the first quarter of 2025, with this guidance anticipating a favorable impact of approximately 180 basis points from foreign exchange rates.
The Zacks Consensus Estimate for net sales is pegged at $177.84 billion, indicating growth of 14.24% from the prior-year quarter’s reported figure. The company has been benefiting from its dominant position in the e-commerce and cloud markets. It is also riding on strengthening generative AI capabilities.
The Zacks Consensus Estimate for first-quarter earnings is pegged at $1.61 per share, reflecting a downward revision of 0.6% over the past 30 days. Management's prior indication that a substantial portion of 2026 AWS capacity is already underwritten by customer commitments should temper near-term concerns.
Image Source: Zacks Investment Research
AMZN’s Earnings Surprise History
Amazon has a mixed earnings surprise history. In the last reported quarter, the company delivered a negative earnings surprise of 1.52%. The company’s earnings beat the Zacks Consensus Estimate in three of the trailing four quarters while missing the same once, the average surprise being 16.5%.
Amazon.com, Inc. Price and EPS Surprise
Amazon.com, Inc. price-eps-surprise | Amazon.com, Inc. Quote
Earnings Whispers for AMZN
Our proven model predicts an earnings beat for Amazon this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.
AMZN has an Earnings ESP of +3.56% and carries a Zacks Rank #3 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Factors Shaping AMZN’s Q1 Results
As Amazon is set to report its first-quarter 2026 earnings, multiple catalysts positioned the company for solid performance across its diversified business segments, while elevated capital spending, tariff-driven pricing pressures, and rising satellite and quick-commerce investments are likely to have weighed on near-term margins. Strategic initiatives in cloud computing, advertising and e-commerce are expected to have supported top-line growth within management's guided range.
AWS and AI Infrastructure Momentum
Amazon Web Services ("AWS") is likely to have sustained its reaccelerating trajectory in the first quarter, following 24% year-over-year growth in the fourth quarter of 2025 to $35.6 billion. The Zacks Consensus Estimate for first-quarter AWS revenues indicates 25.6% year-over-year growth to $36.75 billion. The strategic partnership announced on March 2, 2026, under which Amazon committed up to $50 billion in OpenAI and made AWS the exclusive third-party cloud distributor for OpenAI Frontier, is likely to have strengthened the segment's positioning against rivals like Microsoft (MSFT - Free Report) , Alphabet (GOOGL - Free Report) and Oracle (ORCL - Free Report) . Continued Trainium2 deployment within Project Rainier, the rollout of Trainium3 capacity and a disclosed AI annualized run rate of approximately $15 billion supported momentum. The Jan. 15 general availability of the AWS European Sovereign Cloud broadened reach in regulated industries. However, the scale of the announced $200 billion 2026 capital outlay continued to pressure free-cash-flow expectations and depreciation trajectory.
E-Commerce, Prime and Logistics Strength
The online stores segment is likely to have gained from expanded same-day delivery infrastructure, AI-powered shopping features and continued perishable-grocery momentum. The Zacks Consensus Estimate for online stores is pegged at $62.77 billion, indicating 9.3% year-over-year growth, while subscription-services revenues are projected at $12.92 billion, up 10.3%. The Feb. 11 announcement to expand same-day pharmacy delivery to nearly 4,500 cities by year-end and the launch of Amazon One Medical's weight-management program, integrating GLP-1 treatments, broadened the healthcare offering.
Amazon's physical retail operations are expected to show healthy growth, with the Zacks Consensus Estimate projecting physical store sales of $5.82 billion, indicating a 5.3% year-over-year increase.
However, the company acknowledged that tariff-related cost pressures had begun filtering into retail prices, with third-party sellers increasingly passing through higher costs to consumers.
Third-party seller services remain a significant growth driver with the Zacks Consensus Estimate pegged at $40.7 billion, indicating an 11.6% year-over-year increase.
International segment performance is likely to have benefited from the foreign-exchange tailwind, partially offset by sharper pricing investments in select international stores.
Advertising Services
Advertising services are likely to have sustained robust expansion, with the Zacks Consensus Estimate projecting $16.97 billion, indicating 21.9% year-over-year growth. The integration of the Demand-Side Platform and Sponsored Ads into a unified, AI-assisted workflow, along with Prime Video ad-tier monetization and ongoing partnerships with Netflix, Spotify and SiriusXM, supported scale. Nevertheless, softening brand spending in a tariff-impacted consumer environment and tougher year-over-year comparisons against the fourth quarter's 23% advertising growth pace might have moderated the trajectory in the to-be-reported quarter.
Margin and Capex Considerations
Operating income is expected within management's guided range of $16.5-$21.5 billion compared with $18.4 billion in first-quarter 2025. The wide band reflects approximately $1 billion of incremental Amazon Leo satellite-deployment costs as the constellation scaled, accelerated investment in quick-commerce capabilities, and sharper international pricing. AWS margin expansion, supported by Trainium-driven efficiencies and a rising mix of higher-margin AI workloads, remains the principal offset. The North America segment is expected to deliver $101.89 billion, up 9.7%, with operating leverage tied to fulfillment-network productivity. Backlog disclosures and management commentary on AI-capacity absorption are likely to have remained focal points for investors evaluating the elevated 2026 capital program.
AMZN Price Performance & Stock Valuation
Shares of Amazon have gained 14.6% in the past six-month period compared with the broader Zacks Retail-Wholesale sector and the S&P 500 index’s return of 5.8% and 5.2%, respectively.
AMZN’s 6-Month Performance
Image Source: Zacks Investment Research
Now, let’s look at the value Amazon offers investors at current levels. AMZN is trading at a premium with a forward 12-month P/S of 3.39X compared with the Zacks Internet - Commerce industry’s 2.16X, reflecting a stretched valuation.
AMZN’s P/S F12M Ratio Depicts Stretched Valuation
Image Source: Zacks Investment Research
Investment Thesis
Amazon's first-quarter 2026 setup looks compelling, with AWS reaccelerating toward a projected 25.6% growth, the transformative $50 billion OpenAI partnership reinforcing cloud leadership, and advertising services sustaining 21.9% expansion. Same-day pharmacy expansion, One Medical's GLP-1 program, and Trainium-driven AI efficiencies underscore durable competitive advantages. While the $200 billion capex plan, incremental Leo satellite costs, tariff-related pricing pressures and intensifying cloud competition warrant attention, long-term fundamentals remain robust as customer commitments reportedly underwrite much of the spend. Given the premium valuation and recent EPS revisions, investors should hold, while prospective buyers may await a better post-earnings entry.
Conclusion
Amazon enters its first-quarter 2026 results with AWS momentum, expanding AI partnerships and steady advertising growth, balanced against elevated capex, satellite-related costs, tariff pressures and intensifying cloud competition from Microsoft, Alphabet and Oracle, among others. Given the premium valuation and recent downward EPS estimate revisions, existing investors may continue to hold, while prospective buyers should await a more attractive post-earnings entry point.