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Shares of Amazon have recently staged a significant recovery. According to a Yahoo Finance report, the e-commerce and cloud computing company has gained approximately 14% year to date, including a surge of nearly 25% over the past 30 days.
The stock’s advance comes as Amazon prepares to report its first-quarter results on Wednesday, April 29, after market close. With the stock trading near its 52-week high, investors are closely watching whether the company’s growth narrative can support the recent rally.
Amazon’s fourth-quarter results showed net sales increased 14% year over year to $213.4 billion. Amazon Web Services (AWS) sales rose 24% to $35.6 billion, up from 20% growth in the third quarter, marking the fastest revenue growth rate for AWS in 13 quarters.
The high-margin segment carries a disproportionate share of Amazon’s earnings power. For the full year, AWS generated $45.6 billion in operating income on $128.7 billion in sales, accounting for only 18% of Amazon’s full-year net sales but 57% of its operating income.
Management believes AWS has a long runway as companies continue migrating workloads to the cloud and developing artificial intelligence applications. During the fourth-quarter earnings call, CEO Andy Jassy noted that customers consistently want to run their AI workloads where their other applications and data reside.
This opportunity comes at a high cost. Amazon expects 2026 capital expenditures to total approximately $200 billion. Management indicated the spending will be driven by demand for existing offerings, AI, chips, robotics, and low-earth orbit satellites.
Jassy framed the spending as a direct response to demand, stating that the company is monetizing capacity as fast as it can install it. However, $200 billion remains a staggering figure. Amazon’s free cash flow fell to $11.2 billion for the trailing 12 months ended Dec. 31, 2025, down from $38.2 billion in the prior-year period. Amazon attributed the decline primarily to a $50.7 billion year-over-year increase in purchases of property and equipment, net of proceeds from sales and incentives, largely reflecting investments in AI.
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