Amazon Earnings Preview

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Elephant Earnings specializes in sharp and insightful earnings report analysis. With a focus on uncovering the truth behind the numbers
 

•  05 Feb 2026
 

Wall Street is turning its full attention to Amazon ahead of its quarterly earnings release, and the tension is not really about Amazon itself. It is about what just happened to Microsoft.

After $MSFT lost more than 15% in a week following signs of slower Azure growth, nearly half a trillion dollars in market value evaporated. That shockwave quickly spread across the cloud sector. Investors who once treated cloud computing as a dependable, high-visibility growth engine are now questioning whether the industry is entering a cooling phase.

Now all eyes are on $AMZN and, more specifically, Amazon Web Services. In the previous quarter, AWS delivered strong results, with revenue accelerating to around $23.1 billion, sending the stock sharply higher the next day. At that time, Amazon appeared insulated from broader cloud concerns. Today, the setup feels very different.

The market is trying to determine whether Microsoft Azure slowdown is company-specific or an early warning sign for the entire cloud infrastructure market. If enterprise customers are starting to optimize spending after years of aggressive digital transformation and AI-driven expansion, AWS will not be immune.

For the fourth quarter, analysts expect Amazon to report adjusted earnings of roughly $1.97 per share, up about 6% year over year. Revenue is projected in the range of $211-212 billion, representing annual growth of 12% to 13%. These are solid numbers on paper. But traders know that expectations alone do not move stocks. The forward outlook and AWS trajectory will matter far more.

AWS revenue is forecast at approximately $34.8 billion, implying around 21% annual growth. In a normal environment, that would be considered healthy. In the current climate, however, even a modest deceleration could trigger volatility, especially after what happened to $MSFT. Investors are hypersensitive to any signal that hyperscaler cloud demand is plateauing.

At the same time, capital expenditures are becoming a central issue. The AI arms race has pushed Big Tech into massive spending cycles on data centers, chips, and infrastructure. $GOOGL recently reported strong cloud growth but unsettled investors with higher-than-expected capital expenditure plans for 2026. The message was clear: growth is expensive.

Amazon faces the same scrutiny. The company is expected to update investors on data center expansion, cloud infrastructure investments, and its broader AI strategy. Billions are already flowing into advanced models and partnerships, including its multibillion-dollar investment in Anthropic. That stake has generated meaningful accounting gains in prior quarters, boosting reported profits. But markets tend to discount one-off valuation gains and focus on sustainable operating performance.

Beyond cloud, investors will also examine retail margins and advertising. Amazon has spent the past two years streamlining operations, cutting costs, and improving efficiency. Advertising, in particular, has emerged as one of its most profitable growth engines. If retail profitability continues to improve while advertising expands, Amazon’s diversified model could help cushion any cloud softness.

Still, sentiment around $AMZN is fragile. Over the past year, the stock has underperformed many of its mega-cap peers, rising only modestly compared with stronger gains in the Nasdaq 100 and S&P 500. In early 2026, it has struggled to keep pace with the broader indices. That underperformance raises the stakes for this report. Investors need reassurance.

Amazon benefits from diversified revenue streams spanning e-commerce, advertising, cloud services, and digital content. Yet in the eyes of the market, AWS remains the core narrative driver. If AWS growth holds firm and guidance remains constructive, Amazon could reassert itself as a leader in the AI-powered cloud cycle. If not, traders may start pricing in a broader cloud normalization story.

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