{"id":593490,"date":"2026-04-29T20:39:42","date_gmt":"2026-04-29T20:39:42","guid":{"rendered":"https:\/\/buglecall.org\/?p=593490"},"modified":"2026-04-29T20:39:42","modified_gmt":"2026-04-29T20:39:42","slug":"amazon-drops-after-aws-growth-misses-whisper-estimates-as-capex-soars-3","status":"publish","type":"post","link":"https:\/\/buglecall.org\/?p=593490","title":{"rendered":"Amazon Drops After AWS Growth Misses Whisper Estimates As Capex Soars"},"content":{"rendered":"<p><span class=\"field field--name-title field--type-string field--label-hidden\">Amazon Drops After AWS Growth Misses Whisper Estimates As Capex Soars<\/span><\/p>\n<div class=\"clearfix text-formatted field field--name-body field--type-text-with-summary field--label-hidden field__item\">\n<p>In our preview of Amazon&#8217;s earnings, we summarized sentiment\u00a0as &#8220;Bullish, But Concerns Remain&#8221; with JPM noting that client &#8220;conversations were heavily AWS-skewed with investor focus on degree of acceleration and cloud $ re-capture driven by core workloads, AI, &amp; new partnerships. Still, some concerns remain on broader AI positioning\/strategy, Trainium traction, &amp; gap to Azure\/Google Cloud growth. Strong Stores execution expected, with N. America margin expansion. But higher fuel costs raise questions on consumer demand &amp; operating margins.&#8221; They also warned that <em>if everyone expects big AWS growth and has the same thesis, what breaks it out? <\/em>And then let&#8217;s not forget what broke AMZN a quarter ago when the stock slumped after the company guided a whopping 50% increase in full year capex to $200BN (vs est of $146.1BN). Would it do a similar capex boost this time?<\/p>\n<p>With that in mind, here is what the company reported for Q1 moments ago:<\/p>\n<ul>\n<li>EPS $2.82, <em><strong>beating <\/strong><\/em>exp. 2.63, a solid beat after missing last quarter:<\/li>\n<\/ul>\n<p>Revenue was stronger across the board (except a modest miss in the small physical store sales category):<\/p>\n<ul>\n<li>Net sales $181.52 billion, <em><strong>beating <\/strong><\/em>estimates of $177.23 billion\u00a0\n<ul>\n<li>Online stores net sales $64.25 billion, <em><strong>beating <\/strong><\/em>estimate $62.65 billion<\/li>\n<li>Physical Stores net sales $5.79 billion, <em><strong>missing <\/strong><\/em>estimate $5.81 billion<\/li>\n<li>Third-Party Seller Services net sales $41.58 billion, <em><strong>beating <\/strong><\/em>estimate $40.78 billion, ex\u00a0F\/X +12%, estimate +10.9%<\/li>\n<li>Subscription Services net sales $13.43 billion, <em><strong>beating <\/strong><\/em>estimate $13.07 billion, ex\u00a0F\/X +12%, estimate +11%<\/li>\n<li>Advertising services net sales $17.24 billion, <em><strong>beating <\/strong><\/em>estimate $16.9 billion<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<p>The somewhat mixed news is that the most important revenue item, AWS, <strong>beat the sellside estimate<\/strong>&#8230;<\/p>\n<ul>\n<li>AWS net sales $37.59 billion, <em><strong>beating <\/strong><\/em>estimate $36.68 billion<\/li>\n<\/ul>\n<p>&#8230; even though the YoY increase <u><strong>came in shy of the 30% buyside whisper bogey<\/strong><\/u>:<\/p>\n<ul>\n<li><strong>Amazon Web Services net sales excluding F\/X +28%,\u00a0the fastest growth rate since the second quarter of 2022.<\/strong><\/li>\n<\/ul>\n<p>Geographically the results were also strong, with North America beating by more than $2 billion:<\/p>\n<ul>\n<li>North America net sales $104.14 billion, <em><strong>beating <\/strong><\/em>estimate $102.08 billion<\/li>\n<li>International net sales $39.79 billion, <em><strong>beating <\/strong><\/em>estimate $38.59 billion<\/li>\n<\/ul>\n<p>Going down the line:\u00a0<\/p>\n<ul>\n<li>Operating income $23.85 billion, <em><strong>beating <\/strong><\/em>estimate $20.75 billion<\/li>\n<li>Operating margin 13.1%, <em><strong>beating <\/strong><\/em>estimate 11.7%<\/li>\n<li>North America operating margin +7.9%, <em><strong>beating <\/strong><\/em>estimate +6.85%<\/li>\n<li>International operating margin 3.6%, <em><strong>beating <\/strong><\/em>estimate 2.58%<\/li>\n<\/ul>\n<p>While AWS sales growth was solid (<strong>if below the whisper<\/strong>), just as impressive was the the margin for the segment also increased from 35.03% to 37.68%, just beating the median Wall Street estimate. Elsewhere, North American profit unexpectedly jumped to $14.161 billion, resulting in a profit margin of 7.94%, down from 9.03% a quarter ago, while international margins rose to 3.58% from 2.05%, the highest since Q2 2025.<\/p>\n<p><a data-image-external-href=\"\" data-image-href=\"\/s3\/files\/inline-images\/amzn%20margins%20q1%20.jpg?itok=ecEIlEzT\" data-link-option=\"0\" href=\"https:\/\/cms.zerohedge.com\/s3\/files\/inline-images\/amzn%20margins%20q1%20.jpg?itok=ecEIlEzT\"><img fetchpriority=\"high\" decoding=\"async\" data-entity-type=\"file\" data-entity-uuid=\"8fd99a46-168a-4361-a00a-171e82c3e450\" data-responsive-image-style=\"inline_images\" height=\"467\" width=\"500\" class=\"inline-images image-style-inline-images\" src=\"https:\/\/assets.zerohedge.com\/s3fs-public\/styles\/inline_image_mobile\/public\/inline-images\/amzn%20margins%20q1%20.jpg?itok=ecEIlEzT\" alt=\"\" \/><\/a><\/p>\n<p>As a result of the rise in AWS profits, and generally solid sales margins, Amazon&#8217;s consolidated operating margin posted a notable jump and in Q1 increased 9.7% to 11.7%, just shy of an all time high.\u00a0<\/p>\n<p><a data-image-external-href=\"\" data-image-href=\"\/s3\/files\/inline-images\/amzn%20%20profit%20margin.jpg?itok=737ja7K-\" data-link-option=\"0\" href=\"https:\/\/cms.zerohedge.com\/s3\/files\/inline-images\/amzn%20%20profit%20margin.jpg?itok=737ja7K-\"><img decoding=\"async\" data-entity-type=\"file\" data-entity-uuid=\"52cc464f-7a91-42e3-b293-56d934ad2103\" data-responsive-image-style=\"inline_images\" height=\"279\" width=\"500\" class=\"inline-images image-style-inline-images\" src=\"https:\/\/assets.zerohedge.com\/s3fs-public\/styles\/inline_image_mobile\/public\/inline-images\/amzn%20%20profit%20margin.jpg?itok=737ja7K-\" alt=\"\" \/><\/a><\/p>\n<p>Commenting on the quarter, CEO\u00a0Andy Jassy said that \u201cwe\u2019re making customers\u2019 lives easier and better every day across all our businesses, and their response is driving significant growth&#8230;. <strong>AWS is growing 28% (our fastest growth in 15 quarters) on a very large base, our chips business topped a $20 billion revenue run rate growing triple digits year-over-year <\/strong>, Advertising grew to over $70 billion in TTM revenue, and unit growth in our Stores reached 15% (the highest since the tail end of covid lockdowns).&#8221;<\/p>\n<p>Looking ahead, the company&#8217;s guidance\u00a0 was also very solid:\u00a0<\/p>\n<ul>\n<li><strong>Net sales for Q2 are expected to be between $194 billion and $199 billion; <\/strong>the midpoint of $196.5 billion was a big beat compared to the\u00a0<strong>median estimate of $189.15 billion.<\/strong><\/li>\n<li><strong>Operating income for Q2 is expected between $20.0 billion to $24.0 billion, also above the estimate of $22.86<\/strong><\/li>\n<\/ul>\n<p>The projected 17.2% revenue growth was the highest since June 2021.<\/p>\n<p><a data-image-external-href=\"\" data-image-href=\"\/s3\/files\/inline-images\/AMZN%20guidance%20profit.jpg?itok=zTPFlCAH\" data-link-option=\"0\" href=\"https:\/\/cms.zerohedge.com\/s3\/files\/inline-images\/AMZN%20guidance%20profit.jpg?itok=zTPFlCAH\"><img decoding=\"async\" data-entity-type=\"file\" data-entity-uuid=\"ce11fe70-47be-413d-8f07-bd808dae30ab\" data-responsive-image-style=\"inline_images\" height=\"292\" width=\"500\" class=\"inline-images image-style-inline-images\" src=\"https:\/\/assets.zerohedge.com\/s3fs-public\/styles\/inline_image_mobile\/public\/inline-images\/AMZN%20guidance%20profit.jpg?itok=zTPFlCAH\" alt=\"\" \/><\/a><\/p>\n<p>And while we wait to get some sense of what happened to AMZNs capex guidance, and whether it was revised higher again, here is a less than flattering view of the company&#8217;s free cash flow: the company&#8217;s LTM free cash flow plunged to $1.2 billion for the trailing twelve months, vs $25.9 billion for the trailing twelve months ended March 31, 2025<\/p>\n<p><a data-image-external-href=\"\" data-image-href=\"\/s3\/files\/inline-images\/AMZN%20LTM%20FCF_0.jpg?itok=GO4ZvwQJ\" data-link-option=\"0\" href=\"https:\/\/cms.zerohedge.com\/s3\/files\/inline-images\/AMZN%20LTM%20FCF_0.jpg?itok=GO4ZvwQJ\"><img loading=\"lazy\" decoding=\"async\" data-entity-type=\"file\" data-entity-uuid=\"f84d753d-408d-4ee3-abeb-feef3a978980\" data-responsive-image-style=\"inline_images\" height=\"291\" width=\"500\" class=\"inline-images image-style-inline-images\" src=\"https:\/\/assets.zerohedge.com\/s3fs-public\/styles\/inline_image_mobile\/public\/inline-images\/AMZN%20LTM%20FCF_0.jpg?itok=GO4ZvwQJ\" alt=\"\" \/><\/a><\/p>\n<p>AMZN&#8217;s free cash flow decreased, driven primarily by a year-over-year increase of $59.3 billion in purchases of property and equipment, net of proceeds from sales and incentives. This increase primarily reflects investments in artificial intelligence<\/p>\n<p>And indeed, capex for the quarter soared to $44.2 billion in the first quarter, <strong>exceeded analysts\u2019 expectations, a sign that Amazon is seeing higher expenses for the build-out than anticipated.\u00a0<\/strong><\/p>\n<p>This means that going forward, AMZN will need to burn through its cash or issue new debt to fund further capex growth. Indicatively, AMZN&#8217;s debt soared to $119 billion in Q1, nearly doubling from $65.6 billion at the end of 2025.<\/p>\n<p>Amazon Chief Executive Officer\u00a0Andy Jassy\u00a0has said that the company aims to spend about $200 billion this year \u2014 a 56% increase from 2025 \u2014 mostly on data centers, including those customized for AI services.<\/p>\n<p>After all that, AMZN shares were slightly lower, largely erasing an earlier kneejerk slide lower as we wait for the company&#8217;s earnings call\u00a0<\/p>\n<p><a data-image-external-href=\"\" data-image-href=\"\/s3\/files\/inline-images\/amzn%20drop.jpg?itok=WuOU3NCa\" data-link-option=\"0\" href=\"https:\/\/cms.zerohedge.com\/s3\/files\/inline-images\/amzn%20drop.jpg?itok=WuOU3NCa\"><img loading=\"lazy\" decoding=\"async\" data-entity-type=\"file\" data-entity-uuid=\"9cacc862-f1c4-4c34-9a7e-a823d26c1047\" data-responsive-image-style=\"inline_images\" height=\"275\" width=\"500\" class=\"inline-images image-style-inline-images\" src=\"https:\/\/assets.zerohedge.com\/s3fs-public\/styles\/inline_image_mobile\/public\/inline-images\/amzn%20drop.jpg?itok=WuOU3NCa\" alt=\"\" \/><\/a><\/p>\n<p>\u00a0<\/p>\n<\/div>\n<p>      <span class=\"field field--name-uid field--type-entity-reference field--label-hidden\"><a title=\"View user profile.\" href=\"https:\/\/cms.zerohedge.com\/users\/tyler-durden\" lang=\"\" class=\"username\" xml:lang=\"\">Tyler Durden<\/a><\/span><br \/>\n<span class=\"field field--name-created field--type-created field--label-hidden\">Wed, 04\/29\/2026 &#8211; 16:39<\/span><img decoding=\"async\" src=\"https:\/\/assets.zerohedge.com\/s3fs-public\/styles\/inline_image_mobile\/public\/inline-images\/amzn%20margins%20q1%20.jpg?itok=ecEIlEzT\" title=\"Amazon Drops After AWS Growth Misses Whisper Estimates As Capex Soars\" \/><\/p>","protected":false},"excerpt":{"rendered":"<p>Amazon Drops After AWS Growth Misses Whisper Estimates As Capex Soars In our preview of Amazon&#8217;s earnings, we summarized sentiment\u00a0as &#8220;Bullish, But Concerns Remain&#8221; with JPM noting that client &#8220;conversations were heavily AWS-skewed with investor focus on degree of acceleration and cloud $ re-capture driven by core workloads, AI, &amp; new partnerships. Still, some concerns&hellip; <a class=\"more-link\" href=\"https:\/\/buglecall.org\/?p=593490\">Continue reading <span class=\"screen-reader-text\">Amazon Drops After AWS Growth Misses Whisper Estimates As Capex Soars<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":593468,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"rop_custom_images_group":[],"rop_custom_messages_group":[],"rop_publish_now":"initial","rop_publish_now_accounts":[],"rop_publish_now_history":[],"rop_publish_now_status":"pending","footnotes":""},"categories":[20,23],"tags":[],"class_list":["post-593490","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-economic-empowerment","category-national-security","entry"],"_links":{"self":[{"href":"https:\/\/buglecall.org\/index.php?rest_route=\/wp\/v2\/posts\/593490","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/buglecall.org\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/buglecall.org\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/buglecall.org\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/buglecall.org\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=593490"}],"version-history":[{"count":0,"href":"https:\/\/buglecall.org\/index.php?rest_route=\/wp\/v2\/posts\/593490\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/buglecall.org\/index.php?rest_route=\/wp\/v2\/media\/593468"}],"wp:attachment":[{"href":"https:\/\/buglecall.org\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=593490"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/buglecall.org\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=593490"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/buglecall.org\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=593490"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}