Investors are watching whether AWS growth, backlog and broader revenue can justify Amazon’s AI infrastructure spending as Alphabet’s higher 2026 capex forecast sharpens scrutiny across hyperscalers.
Amazon heads into its second-quarter earnings report with investor focus centered on AWS growth and whether the company signals even heavier AI-related capital spending after Alphabet’s raised 2026 capex outlook triggered a sector sell-off. Wall Street expects Amazon to report earnings per share of $1.82 on revenue of $196.9 billion, including $40.5 billion from AWS, up 31% from a year earlier, while analysts are also watching remaining performance obligations after backlog reached $364 billion last quarter. The setup follows Alphabet’s forecast that 2026 capital expenditures will rise to $195 billion-$205 billion from $180 billion-$190 billion, a move that sent its shares down more than 6% to 7% despite strong cloud results and increased concerns about AI data-center costs, shrinking cash cushions, rising debt and uncertain returns. Amazon said in February that it planned about $200 billion in 2026 capex and reaffirmed that in April, but Visible Alpha consensus has since risen to $207.4 billion, while analysts project $48.7 billion in capex for the current period. AWS remains the key gauge of whether Amazon’s infrastructure buildout is paying off. Analysts expect AWS revenue growth to accelerate from 28% in the first quarter to nearly 32% in the second quarter, alongside strength in e-commerce and advertising, which are projected at $69.8 billion and $19.3 billion respectively. Analysts and investors remain divided: some warn further capex increases could pressure the stock, while others argue the spending is strategically necessary to capture strong AI and cloud demand and avoid capacity shortages.