Amazon Q1: $200B In FY26 CapEx For A $15B Run-Rate Story
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Deep Value Investing12.41K FollowersFollow5ShareSavePlay(10min)CommentsSummaryIn my view, $15B in Amazon.com, Inc.'s AWS AI services ARR is not enough to justify a $200B FY26 CapEx plan. At least, not yet.I want to see AWS AI services ARR increase significantly over the next few quarters, since it still represents only 10% of AWS’s run rate.AWS grew 24% in Q4, and I want to see Q1 revenue coming in clearly above the $36.8B consensus.I see the 34x forward earnings multiple for AMZN stock as hard to defend when Alphabet trades at 29x and Google Cloud is growing at a faster rate.I am downgrading AMZN to Hold heading into the print, though I may reconsider if AWS revenue obliterates expectations and Q2 operating income guidance suggests an expansion. anakeseenadee/iStock via Getty Images Over the last 4 weeks, Amazon.com, Inc. (AMZN) has outperformed the rest of the hyperscalers to the point that the stock has now re-rated at 34x next year's earnings. That’s a rich multiple for aThis article was written byDeep Value Investing12.41K FollowersFollowSmall deep value individual investor, with a modest private investment portfolio, split approx. 50%-50% between shares and call options. I have a B.Sc. in aeronautical engineering and over 6 years of experience as an engineering consultant in the aerospace sector. The latter statement is not relevant in any way whatsoever to my investment style, but I thought to add it for self-indulgent purposes. I have a contrarian investment style, highly risky, and often dealing with illiquid options. How illiquid? Well, you can land a Jumbo on the spread and still have clearance for take-off. From time to time, I buy shares, mostly to not be categorized as a degen by my fellow investor friends, therefore the 50%-50% allocation. My timeframe tends to be between 3-24 months.I like stocks that have experienced a recent sell-off due to non-recurrent events, particularly when insiders are buying shares at the new lower price. This is how I often screen through thousands of stocks, mainly in the US, although I may own shares in banana republics. I use fundamental analysis to check the health of companies that pass through my screening process, their leverage, and then compare their financial ratios with the sector, and industry median and average. I also do professional background checks of each insider who purchased shares after the recent sell-off. I use technical analysis to optimize the entry and exit points of my positions. I mainly use multicolor lines for support and resistance levels on weekly charts. From time to time I draw trend lines, taken for granted, in multicolor patterns. Note: I tried to keep my introduction as real, and authentic as possible. I dislike empty suits, high-level BS, deep-level BS, unnecessary jargon, and self-indulgent, third-person written introductions with an air of superiority.Thanks for reading my introduction!Analyst’s Disclosure: I/we have a beneficial long position in the shares of MSFT, META either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article. Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.