AMZN · Amazon.com, Inc.

Amazon’s Q1 2026 results reflect extraordinary top-line and bottom-line expansion, anchored by AWS’s 28% growth—the strongest in 15 quarters—and accelerated monetization of its AI infrastructure stack. The $30.3 billion net income includes a $16.8 billion pre-tax gain from Anthropic investments, which materially inflated GAAP earnings but underscores strategic alignment and valuation upside in AI partnerships. Excluding this non-operating item, underlying operating income grew 30% year-over-year to $23.9 billion, with AWS contributing $14.2 billion of that—75% of total operating income—highlighting deepening margin leverage in cloud and silicon. Revenue growth was broad-based: North America (+12%) and International (+19%, +11% ex-FX) benefited from faster delivery, expanded selection, and AI-powered shopping tools like Rufus and Sponsored Brand Prompts; AWS (+28%) was propelled by massive Trainium/Graviton adoption, evidenced by $20B+ chips run rate and multi-gigawatt commitments from OpenAI and Anthropic. However, the sharp decline in free cash flow—from $25.9B to $1.2B TTM—signals aggressive capital deployment into AI infrastructure, with $59.3B higher capex primarily funding data centers, chip fabrication, and satellite launches for Amazon Leo. Management’s commentary emphasizes inflection points: AI agent adoption (Bedrock usage up 170% QoQ), hardware scale (2.1M+ AI chips landed), and new monetization vectors (Health AI, Amazon Now, Prime Day expansion). Second-quarter guidance of $194–199B in net sales implies sustained 16–19% YoY growth, confirming continued strength across all three segments despite macro uncertainty. Investors should monitor the sustainability of non-operating gains and whether capex intensity begins moderating as AI infrastructure scales.