Amazon (AMZN) on Solana

Amazon reported Q2 2026 revenue growth of 20%, its fastest pace in five years, with operating income jumping 43% to $27.5 billion. AWS led the way with 37% revenue growth to $42.2 billion — its best rate since 2021 — fueled by surging enterprise AI demand, while advertising accelerated to 26% growth, the strongest since 2023. North American e-commerce rose 16% to $116.2 billion, partly aided by a Prime Day calendar shift that contributed roughly 400 basis points to overall growth.

Despite the blowout quarter, Amazon stock gave back most of its initial 15% post-earnings pop as rising interest rates weighed on the broader market. Management guided Q3 revenue growth at 9%–12%, or 13%–16% when adjusted for the Prime Day timing shift. The company is also projecting roughly $200 billion in capital expenditures, weighted heavily toward data center build-out for AI workloads. Analysts note that at normalized valuations — accounting for unrealized gains on Amazon's Anthropic stake — the stock trades in line with the S&P 500, and characterize it as a clear beneficiary of AI-driven cloud infrastructure demand.

Reports of a potential Anthropic IPO at a $2 trillion valuation as early as October 2026 are putting fresh scrutiny on Amazon's outsized position in the AI lab. As of June 30, Amazon holds approximately 19.7% of Anthropic through $97.9 billion in convertible notes and $92.5 billion in nonvoting preferred stock, carrying the combined position at $190.4 billion on its balance sheet. A $2 trillion public market valuation would mark that stake up to roughly $394 billion — more than doubling the current book value in a single re-rating event.

For Amazon shareholders, the implied look-through exposure is meaningful but not transformative on its own. A $10,000 position in Amazon today carries roughly $1,430 in Anthropic exposure, and a successful $2 trillion IPO would add approximately $740 in incremental look-through value once the step-up from carrying cost to public market price is accounted for. Beyond the financial return, the investment structure ties Anthropic's compute spending to AWS, validates Amazon's in-house Trainium chips, and gives the company direct upside at the AI model layer — a strategic bet that the potential mark-up would make considerably more legible to outside investors.

Since Andy Jassy took over as CEO in July 2021, Amazon's market capitalization has grown 50% to roughly $2.7 trillion, while its valuation has become notably more attractive — the price-to-earnings ratio has fallen to around 20, well below its five-year median of 50 and below the S&P 500's average of 26. Much of the credit goes to AWS, the cloud division Jassy previously led, which accounted for 60.5% of Amazon's total operating profits in Q2 2026, posting 36.8% year-over-year sales growth to $42.2 billion and a 63.6% rise in operating income to $16.6 billion. AWS holds a 28% market share in cloud infrastructure, ahead of Microsoft Azure at 20% and Google Cloud at 15%.

To keep pace with surging generative AI demand, Amazon dramatically increased capital expenditures from $131.8 billion in 2025 to $220 billion in 2026 — a bet on data center capacity that some investors view cautiously but that the company frames as justified given AWS's growth runway. Jassy has suggested AWS could eventually reach $1 trillion in annual revenue, and with the stock trading at a meaningful discount to historical norms, analysts view Amazon shares as positioned for long-term compounding.

Amazon raised roughly $100 billion in bonds during 2026 — about 45% of its estimated $220 billion annual capital-spending plan — to fund a massive AI infrastructure buildout. S&P responded by flagging "hyperscaler credit risk," warning that companies like Amazon are also financing smaller AI counterparties, linking elite credit profiles to far weaker balance sheets. Amazon's free cash flow turned negative at -$7.6 billion in the most recent quarter due to surging property investment, even as trailing operating cash flow stood at $161.4 billion.

AWS continued to underpin the investment thesis: Q2 2026 revenue jumped 37% to $42.2 billion with a 39.3% operating margin, generating $16.6 billion in segment income. S&P's concern centers on timing — whether AI revenue scales fast enough before depreciation, interest expenses, and partner commitments weigh simultaneously on earnings. Amazon shares gained about 1.5% to $255.71 on September 11 following the S&P report.

Amazon's Zoox subsidiary began charging customers for rides in Las Vegas in August 2026, marking its transition from a free promotional service to a revenue-generating business. The company has since announced testing operations in Houston and San Diego — with human supervisors on board — bringing its total U.S. market presence to 12 cities. Zoox previously operated free rides in Las Vegas, San Francisco, Austin, and Miami, and plans to introduce purpose-built autonomous robotaxis after completing the mapping and testing phase in each new market.

The expansion comes as competition in the U.S. robotaxi sector sharpens. Waymo, backed by Alphabet, already operates across 14 cities at roughly 500,000 paid rides per week and recently launched commercial service in Denver, Tampa, and San Diego. Tesla is also preparing to disclose further details on its driverless Cybercab offering. Goldman Sachs projects the U.S. robotaxi market will grow from around $3 billion in 2027 to $19 billion in 2030 and $48 billion by 2035 — a scale that frames the long-term stakes of Amazon's continued investment in Zoox.

The FTC and 22 state attorneys general filed suit against Amazon on August 31, accusing the company of secretly manipulating its advertising auction system to overcharge more than one million advertisers over seven years. The complaint centers on Amazon's Sponsored Product and Sponsored Brand ad auctions, which operate on a "second-price" model under which winners are supposed to pay only one cent more than the next-highest bid. According to the FTC, Amazon quietly introduced an undisclosed surcharge in 2019 — internally referred to as a "soft reserve price" — that caused advertisers to be billed their full winning bid approximately 80% of the time. The agency alleges Amazon executives gave false and misleading answers to advertisers who asked directly whether the auction format had changed, and estimates the scheme extracted tens of billions of dollars from over 1.2 million advertising customers, including more than 500,000 small and medium businesses.

The lawsuit poses material risk to Amazon's advertising segment, now one of its highest-margin businesses. Potential remedies include disgorgement of unlawful gains; with some reports citing figures exceeding $20 billion, the financial exposure is significant. The case supplements an existing 2023 FTC antitrust action against Amazon set for trial next year, and comes after Amazon's $2.5 billion Prime-related settlement in 2025, signaling sustained regulatory pressure on the company's core revenue lines. Amazon disputes the allegations, arguing that average cost-per-click remained flat in inflation-adjusted terms from 2019 to 2024 and that its auction system saved advertisers $8 billion between 2021 and 2025.

Amazon shares have gained roughly 50% since Jeff Bezos stepped down as CEO in mid-2021, a figure that trails the S&P 500's ~90% return and the Nasdaq-100's more than 100% gain over the same period. Despite now carrying a $2.8 trillion market cap and committing an estimated $220 billion to AI infrastructure in 2026 alone, the stock has struggled to keep pace with broader indices under Andy Jassy's leadership — illustrating how sheer scale can constrain relative returns even when the underlying business continues to grow.

The comparison has gained fresh relevance as Apple CEO Tim Cook steps down on September 1, 2026, prompting investor debate over whether large-cap technology giants routinely underperform index benchmarks following high-profile founder or long-tenure CEO exits. For Amazon, the lag reflects the compounding challenge of deploying massive capital into new markets while the starting valuation base was already enormous — not a signal of business deterioration.

Amazon has moved to triple its orders of Nvidia GPU chips to support AWS infrastructure and internal AI projects, continuing a dual-chip strategy that pairs third-party Nvidia hardware with its own proprietary AI silicon. The stepped-up procurement underscores the heavy capital commitments Amazon is making to position AWS competitively as enterprise AI workloads scale, even as analysts flag the long-term payback risk of sustained chip and data center spending.

In parallel, Zoox — Amazon's autonomous vehicle subsidiary — has selected LG Innotek to supply advanced camera modules for its robotaxi platform. The supplier agreement signals that Zoox is moving deeper into production readiness, expanding Amazon's footprint in self-driving mobility alongside its cloud AI push.

Bill Ackman's Pershing Square Capital trimmed its Amazon position by more than 25% — shedding approximately 2.9 million shares — in Q2 2026 while simultaneously lifting its Microsoft stake by roughly 10%. Though Ackman issued no public statement on the Amazon reduction, Pershing's investment filing reveals a preference for cash generation alongside AI-era growth. Amazon posted negative free cash flow of $7.6 billion during its AI infrastructure build-out, while Microsoft generated $19.6 billion in free cash flow over the same period. With Amazon committing $220 billion in data center capital expenditures in 2026, the capital intensity of its cloud AI expansion appears to be the key friction point for a fund that prizes profitability alongside growth.

The exit comes against a backdrop of strong AWS fundamentals. AWS operating income rose 64% year-over-year in Q2 and now accounts for roughly 60% of Amazon's total operating income, while Amazon's overall Q2 revenue grew 20% and operating income climbed 43%. Ackman's trim reads less as a verdict on AWS's competitive standing — the division continues to narrow the growth gap with Azure and Google Cloud — and more as a signal that capital-discipline-focused investors may wait for Amazon's massive capex cycle to translate into durable free cash flow before increasing their exposure.