Amazon to Announce Q1 Earnings Post-Market

• AWS revenue expected to reach $36.92 billion, marking approximately 26% growth and building on its fastest expansion in three years during Q4
• Amazon projected 2026 capital expenditures will hit $200 billion, over $50 billion above analyst expectations, driven by AI data center buildouts and Project Kuiper satellite infrastructure
• Company announced 16,000 employee layoffs in Q1 and introduced a 3.5% surcharge for third-party sellers due to oil price increases from Middle East conflict

Amazon Q1 Earnings Summary

Key Expectations:

Amazon is set to report first-quarter earnings after market close Wednesday. Wall Street anticipates revenue of $177.3 billion, representing 14% year-over-year growth compared to 8.6% growth in Q1 last year. Key segments expected include Amazon Web Services (AWS) at $36.92 billion and Advertising at $16.87 billion.

Main Focus Areas:

*AWS and AI Spending:* Investors will closely monitor AWS performance, projected to grow roughly 26% year-over-year after posting its fastest growth in three years last quarter. Amazon previously announced capital expenditures will reach $200 billion by 2026, over $50 billion above analyst expectations, primarily driven by AI infrastructure investments.

*Strategic AI Partnerships:* Amazon recently deepened investments with OpenAI and Anthropic, with both committing to increased AWS cloud usage. Stifel analysts suggest these deals could push capital expenditure even higher than current guidance.

Other Developments:

• Amazon announced 16,000 employee layoffs in Q1, following 8,000 cuts in October
• Project Kuiper satellite internet service targets mid-2026 commercial launch
• Amazon acquiring satellite company for approximately $11.57 billion, its second-largest acquisition
• Company faces July FCC deadline requiring roughly half of its 3,236-satellite constellation in orbit
• Introduced 3.5% fuel surcharge for third-party sellers due to U.S.-Iran conflict supply chain disruptions

Market Context:

Amazon reports alongside fellow tech giants Meta, Microsoft, and Apple, all updating Wall Street on capital expenditure plans amid heightened AI spending scrutiny and geopolitical uncertainties affecting supply chains and oil prices.