Amazon (AMZN)

Q1 2026 Results

We are catching up with some Q1 results. The delay in getting round to them does not bother us unduly, as we are not interested in the short- term impact of the results. Our aim is to see if the results signify any change in our long-term and considered view of the business

We have several written notes on Amazon.com (AMZN). The first was an “Initiating Coverage” type note on 12 May 2023 and can be found here. In our biased view, it is definitely worth reading! The second was written after the Q2 2023 results and it can be found here.

As with many other companies, the focus of the conversation during the Q1 2026 earnings conference call was Artificial Intelligence (AI) .

Andy Jassy has continued founder Jeff Bezos’s tradition of writing an annual CEO letter. The most recent such letter was published with the Q1 Results. We reviewed it in early April and that report can be found here.

Amazon is the largest hyperscaler by virtue of being the pioneer in the cloud hosting business. It is making the largest investment in the AI datacentre investment boom.

They have taken some large steps in this direction. Amazon is making the biggest strategic reset of the Jassy era with one clear goal to make AWS the infrastructure layer for the AI economy. They

• agreed to invest $50bn in OpenAI.

• already has own AI stack with Nova, Trainium & Bedrock.

• are building a $25bn Mississippi data center cluster for Anthropic.

• have expanded Anthropic partnership to $13bn with option for another $20bn.

Total capital spending will be ~$200bn (!) this year across AI datacentres, custom chips, networking, warehouse robotics & satellites. AWS doesn’t need to own the winning AI model but to make sure every major AI model, workload & customer eventually runs through AWS.

It is difficult to overstate the scale of the capital expenditure, Amazon is engaged in. It was $12bn in 2017 and will cross $200bn in 2026. In the above chart, capital expenditure is shown as a negative bar as it represents a cash outflow.

Q1 Results