Amazon Earnings Preview: Investors Bet on Anthropic Collaboration for Upside

$Amazon.com(AMZN)$   is scheduled to release its financial results post-market on April 29 ET.

Market expectations suggest the cloud giant will benefit substantially from its partnership with Anthropic, although the recent stock price has partially factored in this expectation.

On April 20, Amazon invested an additional $5 billion in Anthropic, with a potential total commitment of up to $20 billion. This comes on top of its prior $8 billion investment.

Investors should also be wary of the risks associated with the acceleration in CapEx, and management will need to justify it.

Core Financial Indicators

– Amazon's revenue is expected to be $177.18B for 2026Q1, up 13.82% YoY.

– EPS is estimated to be $1.653, up 3.97% YOY.

Three Things to Watch

Global Retail Growth

The first quarter is typically a low point for Amazon's retail business. However, improvements in brick-and-mortar stores, continued growth in e-commerce penetration, and expanded reach of fast delivery are expected to maintain Amazon's retail growth momentum.

Advertising is another fast-growing segment for Amazon, with revenue maintaining a growth rate of over 20%.

AWS Business

The market will closely monitor the company's guidance for Q2 and the full year of 2026, particularly whether AWS's growth rate can be sustained or accelerated.

Amazon is aggregating top-tier third-party AI models through its "model supermarket" strategy. Recently, by increasing its investment in Anthropic, Amazon has secured cloud computing orders worth 100 billions of dollars for the coming years.

On April 9, Amazon revealed that AWS's AI annualized revenue has reached $15 billion, with its custom chip business hitting an annualized run rate of $20 billion.

In addition, AWS's AI services have also penetrated the consumer side. Investors can keep an eye on the user count of the AI shopping assistant Rufus, as well as its incremental annualized sales.

Capital Expenditures

Amazon plans to invest up to $200 billion in capital expenditures in 2026, with the vast majority allocated to AI infrastructure for AWS, including data centers, self-developed chips, and networking equipment. The year-over-year growth of CapEx for Q1 2026 is projected to hit 71.3%.

This aggressive spending plan, which far exceeds that of its peers, had previously sparked investor concerns over short-term profits, leading to stock price volatility. Therefore, how management articulates the return cycle and expectations for this investment during the earnings call will be a key focus for the market. CEO Andy Jassy has explicitly stated that the newly added AI capacity will be monetized rapidly once deployed.

Option Market Signals

The put/call ratio for Amazon options is currently 0.62, which is at a relatively low level, reflecting strong bullish momentum. IV (Implied Volatility) data shows that its volatility is 42.83%. On average, the stock price has fluctuated by 6.47% on the first trading day after past earnings announcements.

Summary of Risks and Opportunities

– Potential Positive Catalysts: Advertising industry recovery; strong demand for cloud services

– Risks to Monitor: macroeconomic slowdown

– Valuation:

Amazon's PE ratio is 36.82 times, which is at the 49th percentile of its historical range over the past five years.

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