Core Insights - The significant capital expenditure (capex) forecasts indicate a strong commitment from major companies towards AI and related technologies, with a notable portion of the spending directed towards robotics and satellite technologies [1][2][4] - Approximately 80% of the capex is expected to be AI-related, reflecting the companies' confidence in the future of AI and its potential impact on their business models [2][4] - The anticipated $600 billion in capex from a select few companies suggests a substantial shift in revenue and profit pools within the software industry, indicating a potential disruption [3][4] Company-Specific Insights - Companies like Google and Amazon are expected to continue investing heavily in AI, with their capex numbers signaling a long-term commitment to this transformation [5][6] - The market's reaction to these capex announcements, particularly in the software sector, raises questions about the competence of these companies in navigating the evolving landscape [4][5] - The ongoing investment in AI infrastructure is seen as a precursor to increased utility and disruption across various sectors, not limited to software [6][7]

Market Overview - The S&P 500 is down 1% and the NASDAQ 100 is down more than 1% during a rough trading session, indicating a deteriorating market sentiment [1][2] - Bitcoin has experienced a significant decline, dropping about 10% to around $65,000, erasing gains from previous weeks [2][4] Tech Sector Insights - The percentage of NASDAQ 100 stocks below the 100-day moving average has surpassed 50% for the first time since late November, indicating negative momentum in the tech sector [3] - Alphabet reported a 20% surge in revenue last quarter, but this has not alleviated skepticism among tech investors, raising concerns about Amazon's upcoming earnings [6][9] Investment Trends - There is a strong bid into Treasuries, with 10-year Treasury yields decreasing by six to seven basis points, reflecting a flight to safety amid market volatility [2][4] - The current market environment is characterized by a rotation rather than a wholesale selloff, with investors taking profits and becoming more cautious [21][78] Company-Specific Developments - Amazon's earnings report is highly anticipated, with expectations that it will reflect broader trends in the tech sector [9][26] - XPO shares have reached a record high, driven by strong performance in the retail and industrial sectors, indicating a potential recovery in these areas [59][60] Capital Expenditure Outlook - Alphabet has earmarked $182 billion for capital expenditures by 2026, suggesting a focus on long-term growth despite current market challenges [7] - The overall sentiment in the market is shifting towards questioning the return on investments, particularly in the tech sector [8] Consumer Behavior and Market Dynamics - The furniture retail sector, represented by Bob's Discount Furniture, is seeing a successful IPO, raising $331 million, indicating strong consumer demand despite economic uncertainties [27][29] - Tapestry, the parent company of Coach, reported record sales and earnings, highlighting effective brand strategies targeting younger consumers [66][72]

Core Insights - Amazon reported revenue of $213.39 billion for the quarter ended December 2025, reflecting a year-over-year increase of 13.6% and a surprise of +0.91% over the Zacks Consensus Estimate of $211.46 billion [1] - The earnings per share (EPS) for the quarter was $1.95, slightly below the consensus estimate of $1.98, resulting in an EPS surprise of -1.52% [1] Revenue Performance - Subscription services saw a year-over-year change of +12%, exceeding the average estimate of +10.8% [4] - Physical stores reported a +5% change compared to the estimated +4.8% [4] - Amazon Web Services (AWS) net sales grew by +24%, surpassing the average estimate of +21.8% [4] - Third-party seller services experienced a +10% change, close to the average estimate of +10.7% [4] Net Sales Breakdown - AWS net sales reached $35.58 billion, exceeding the estimated $35.03 billion, representing a +23.6% change year-over-year [4] - Physical stores generated $5.86 billion in net sales, slightly below the estimated $5.88 billion, with a +5% year-over-year change [4] - Online stores reported net sales of $82.99 billion, above the estimated $82.4 billion, marking a +9.8% change [4] - Subscription services net sales were $13.12 billion, exceeding the average estimate of $12.86 billion, reflecting a +14% year-over-year change [4] - North America net sales totaled $127.08 billion, slightly below the estimate of $127.14 billion, with a +10% year-over-year change [4] - Advertising services net sales reached $21.32 billion, surpassing the estimated $21.21 billion, representing a +23.3% change [4] - International net sales were $50.72 billion, exceeding the estimated $49.34 billion, with a +16.8% year-over-year change [4] - Third-party seller services net sales were $52.82 billion, above the average estimate of $52.27 billion, reflecting a +11.2% year-over-year change [4] Stock Performance - Amazon's shares have returned -3.6% over the past month, while the Zacks S&P 500 composite has increased by +0.5% [3] - The stock currently holds a Zacks Rank 2 (Buy), indicating potential for outperformance in the near term [3]

Core Insights - The article discusses Amazon's significant increase in capital expenditures (capex), projecting it to reach $200 billion by 2026, which is substantially higher than previous estimates of around $140 billion and consensus estimates of approximately $146 billion [2][5][4] - The acceleration of Amazon Web Services (AWS) growth to 24% is highlighted as a positive aspect, exceeding market expectations of 21-22% [2][3] - The competitive landscape among major tech companies, including Google, Microsoft, and Meta, is driving aggressive investments in compute resources to meet rising AI demand [7][19] Capital Expenditures - Amazon's capex for 2026 is projected at $200 billion, representing a 50% increase from 2025, which itself was a 60% increase from 2024 [3][4] - Analysts had previously estimated a much lower capex, indicating a significant upward revision in spending expectations [5][2] - The high capex is seen as necessary for Amazon to capture AI demand and maintain its competitive edge [4][19] AWS Growth - AWS growth has accelerated to 24%, which is a critical metric for evaluating the effectiveness of Amazon's increased spending [2][12] - Analysts expect AWS growth estimates to rise further due to the substantial capex commitment [12] - AWS margins have been solid, hovering around the mid-30% range, with potential for further improvement [12][13] Competitive Landscape - Major tech companies are competing for compute resources, which are essential for sustaining market advantages in the AI space [7][19] - Amazon's previous underinvestment in compute resources is acknowledged, emphasizing the need for increased spending to avoid falling behind competitors [9][19] - The demand for compute resources remains high, with companies like Nvidia experiencing sustained demand for their products [9][19] Long-term Outlook - The long-term growth potential for Amazon is supported by its high-margin businesses, including AWS and advertising, which are expected to drive significant operating margin expansion over the next 5 to 10 years [23][24] - Amazon is projected to exceed $1 trillion in annual revenue within the next decade, indicating substantial earnings potential [24] - The perception of Amazon as playing catch-up in the AI space is acknowledged, but the company is making progress in scaling its capabilities [25][28]

At this time, I’ve decided to downsize my holdings in Amazon.com, Inc. ( AMZN ). I am uncomfortable with holding the shares now after the latest earnings announcementI’m a Portfolio manager (flexible equity funds and private clients), fundamental equity research, macro and geopolitical strategy.Over 10 years across global markets, managing multi-asset strategies and equity portfolios at a European asset manager.I combine top-down macro, bottom-up stock selection and real-time positioning (Bloomberg, models, ...

Core Viewpoint - The decision to downsize holdings in Amazon.com, Inc. (AMZN) is driven by discomfort following the latest earnings announcement [1] Group 1: Company Analysis - The portfolio manager has a long position in AMZN, indicating a previous confidence in the stock [1] - The focus of the analysis includes earnings, technological disruption, policy shifts, and capital flows, which are critical in identifying mispriced opportunities [1] Group 2: Market Strategy - The portfolio manager employs a combination of top-down macro analysis and bottom-up stock selection to inform investment decisions [1] - The strategy involves real-time positioning using tools such as Bloomberg and data models [1]

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ____________________________________ FORM 10-K ____________________________________ (Mark One) ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2025 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to . Commission File No. 000-22513 ____________________________________ ...

Core Insights - Amazon's stock has declined over 7% in extended trading after missing quarterly earnings estimates and announcing a significant increase in AI spending, which surprised investors [1][1] - The company plans to invest up to $200 billion in capital expenditures this year, exceeding analysts' expectations of approximately $160 billion [1][1] - CEO Andy Jassy expressed confidence in a "strong long-term return" on these investments, particularly highlighting the growth in Amazon Web Services (AWS) [1][1] Financial Performance - Amazon's total revenue for the fourth quarter reached a record $213.4 billion, driven by a 24% year-over-year growth in AWS revenue, which amounted to $35.6 billion [1][1] - Earnings per share for the quarter were reported at $1.95, slightly below analyst consensus [1][1] - The company anticipates first-quarter revenue between $173.5 billion and $178.5 billion, with analysts expecting $175.38 billion [1][1] Market Context - Amazon's stock performance has been notably weak among the "Magnificent Seven," with a year-to-date decline of about 4% as of Thursday's close [1][1] - Other major tech companies, including Microsoft and Google, have also faced stock declines following announcements of increased spending forecasts in AI [1][1]

Core Insights - Amazon Web Services (AWS) achieved its strongest quarterly growth rate in over three years, with a revenue of $35.6 billion in Q4 2025, representing a 24% year-on-year increase and the largest growth rate in 13 quarters [2][3] Revenue and Financial Performance - AWS's annual revenue run rate is $142 billion, with operating income rising to $12.5 billion in Q4 2025 from $10.6 billion in Q4 2024 [2] - AWS contributed 16.6% to Amazon's overall revenue of $213.4 billion in Q4 [7] Competitive Positioning - CEO Andy Jassy highlighted that AWS's 24% growth on a $142 billion run rate is more significant than competitors' higher percentage growth on smaller bases, emphasizing AWS's leadership in incremental revenue and capacity [3] - AWS has secured new agreements with major companies and government entities, including Salesforce, BlackRock, Perplexity, and the U.S. Air Force, which fueled the fourth-quarter growth [3] Market Trends and Customer Demand - A significant portion of AWS's business comes from enterprises transitioning from on-premise infrastructure to the cloud, alongside a boost from the AI sector due to AWS's comprehensive AI stack functionality [5][7] - AWS is seeing increased demand as customers run large AI workloads, which contributes to expanding their core AWS footprint [7] Infrastructure Expansion - In Q4, AWS added over a gigawatt of power to its data center network, indicating ongoing infrastructure growth [4]

Core Insights - Amazon reported quarterly earnings of $1.95 per share, missing the Zacks Consensus Estimate of $1.98 per share, but showing an increase from $1.86 per share a year ago, resulting in an earnings surprise of -1.52% [1] - The company posted revenues of $213.39 billion for the quarter ended December 2025, surpassing the Zacks Consensus Estimate by 0.91% and increasing from $187.79 billion year-over-year [2] - Amazon has outperformed the S&P 500 with a year-to-date gain of about 0.9% compared to the S&P 500's gain of 0.5% [3] Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is $1.71 on revenues of $175.47 billion, and for the current fiscal year, it is $7.90 on revenues of $797 billion [7] - The estimate revisions trend for Amazon was favorable ahead of the earnings release, resulting in a Zacks Rank 2 (Buy) for the stock, indicating expected outperformance in the near future [6] Industry Context - The Internet - Commerce industry, to which Amazon belongs, is currently ranked in the bottom 32% of over 250 Zacks industries, suggesting that the overall industry outlook may impact Amazon's stock performance [8] - Another company in the same industry, Fiverr International, is expected to report quarterly earnings of $0.76 per share, reflecting a year-over-year change of +18.8%, with revenues projected at $108.71 million, up 4.9% from the previous year [9][10]