Amazon will release its first-quarter earnings on Wednesday, along with Google, Meta, and Microsoft. Investors are eager to see if the company’s huge investments in artificial intelligence are starting to pay off. Together, these big AI companies are expected to spend a whopping $650 billion on capital expenses by 2026, with Amazon alone accounting for $200 billion of that.
Despite this massive spending, Wall Street has mostly been positive about Amazon. The cloud and e-commerce giant’s stock has risen 13% this year. That’s better than Google’s 12% increase and much better than Microsoft, which is down 12%. However, Amazon is also dealing with higher shipping costs because fuel prices are going up. This could impact its e-commerce revenue this quarter.
According to Brian Nowak of Morgan Stanley, a bad scenario for fuel costs could hit Amazon with a $4 billion setback, even after factoring in fuel surcharges. His main prediction sees $600 million in costs for the first quarter and $2 billion for the second quarter. He assumes Amazon will find ways to offset these costs in the second half of the year.
For the first quarter, experts predict Amazon will report earnings per share (EPS) of $1.62 on revenue of $177.2 billion, based on Bloomberg’s average analyst estimates. Last year in Q1, the company reported EPS of $1.59 and revenue of $155.6 billion. Amazon’s e-commerce business is expected to bring in $62.65 billion. Its advertising business is projected to generate $16.89 billion, a 21% increase from last year. The company’s Amazon Web Services (AWS) revenue is estimated to reach $36.79 billion, up 25% from the same time last year.
Investors will pay close attention to Amazon’s “remaining performance obligations” (RPOs). These are contracts the company has signed with customers but has not yet been paid for. In the fourth quarter, Amazon reported RPOs of $244 billion. This number gives Wall Street an idea of how much demand Amazon sees for its cloud platform and how much of that demand it can meet.
Earlier this month, CEO Andy Jassy wrote in his yearly letter to shareholders that AWS’s AI revenue has an annual run rate of over $15 billion as of Q1 2026 and continues to grow. He also noted that the business could be growing even faster, but the company still faces limits on its capacity. This is despite adding 3.9 gigawatts of power in 2025 and planning to double that by 2027.
