Key Stats for Amazon Stock
- Price change for Amazon stock in last 6 months: -6%
- $AMZN Stock Price as of Oct. 23: $248
- 52-Week High: $287
- $AMZN Stock Price Target: $332
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What Happened?
Amazon (AMZN) CEO Andy Jassy says AWS cloud capacity is largely sold out through 2027.
He also said a good chunk of 2028 is already spoken for, and made the comments on Friday in a video podcast with Andreessen Horowitz.
Jassy said Amazon is struggling to keep up with demand from AI labs and big companies, while noting that AWS always keeps some capacity open for on-demand use and for Bedrock and EC2.
Amazon has said it will spend about $220 billion on capital expenditure in 2026.
Jassy said the company “could invest a lot more and it wouldn’t be a bad use of capital,” which indicates strong demand trends.
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What the Market Is Telling Us About Amazon Stock
For Amazon stock, the message is simple. Demand for AI computing is running ahead of supply, and the company’s last earnings call backs this up.
In Q2, AWS revenue was $42.2 billion, up 36.7%, the fifth straight quarter of accelerating growth. AWS operating income was $16.6 billion, and AWS backlog stood at $496 billion, while it is growing triple digits.
Total company revenue was $200.6 billion, up 20%, and operating income was $27.5 billion. Cash capital spending was $53.1 billion in Q2.
Management said the heavy spending will create free cash flow pressure for now, and data centers take about two years to build before they can earn money.
After that, Amazon says they can earn for more than 30 years given that servers take a little under three years to break even.
So Amazon stock is a story of spending now for payoff later. Sold-out capacity helps that case, because it shows customers are lining up to use what Amazon builds.
Amazon reports Q3 results on October 29. For Q3, management guided to net sales of $197 billion to $202 billion and expects operating income of $22.5 billion to $26.5 billion.
Investors in Amazon stock will watch AWS growth, spending, and any update on capacity.
Another strong AWS number could support the demand story. A slowdown would raise questions about all that spending.
Either way, Amazon stock may move sharply around the report.
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So what is Amazon stock actually worth?
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Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any stocks mentioned. Thank you for reading, and happy investing!
