"Amazon is known as a hyperscaler because it's spending significant sums of money on artificial intelligence (AI) efforts. Management forecasts $125 billion in capital expenditures (capex) this year for things like building data centers and developing chips. That figure will likely increase next year. Peers like and are spending ridiculous amounts on expanding their AI infrastructure as well. Amazon must keep up, or risk getting left behind in what could be a revolutionary technology shift."
"It's a major financial contributor, with third-quarter revenue of $33 billion and operating income of $11.4 billion. In 2026, AWS should remain top of investors' minds. AWS has received a boost from strong customer interest in leveraging AI tools in their own operations. is a notable customer, and is a longtime partner. AWS' ongoing success should lift Amazon's financial results in 2026."
Amazon's shares have risen only 2% year-to-date as of Dec. 17 despite a history of outperforming the market. The company faces competitive forces, regulatory issues, and macro headwinds heading into 2026. Management forecasts $125 billion in capital expenditures this year for data centers and chips, and that figure will likely increase next year. A large portion of capex funds Amazon Web Services (AWS), which generated $33 billion in third-quarter revenue and $11.4 billion in operating income. AWS benefits from customer demand for AI tools. Amazon's digital advertising revenue rose 22% year-over-year to $17.7 billion last quarter.
Read at The Motley Fool
Unable to calculate read time
Collection
[
|
...
]