Amazon AMZN missed EPS estimates in its December-quarter report, however the enterprise is in any other case actually firing on all cylinders.
The market’s destructive response to the Amazon report wasn’t because of the EPS miss, however quite to administration’s eye-popping capital spending finances for 2026, which coincided with renewed worries in regards to the broader AI area and rising fears that this new know-how may significantly erode the earnings energy of legacy know-how companies like software program.
The market’s response to Amazon is broadly in the identical class as Alphabet’s GOOGL after its quarterly launch, with the severity of Amazon’s ‘punishment’ reflecting buyers’ shock at studying of administration’s AI plans. Amazon plans to spend $200 billion in capital expenditures in 2026, up from $132 billion in 2025 and $83 billion in 2024. Amazon’s working money flows modestly exceeded its $132 billion capex outlays in 2025, however the firm’s 2026 capex finances will most certainly exceed its working money flows.
Earlier than we learnt of those lofty spending plans, many out there anticipated 2026 to be the capex peak for Amazon (Alphabet and others). However administration’s commentary in regards to the mission-critical nature of those outlays seemingly signifies that it might be untimely to declare peak capex. Amazon shares are actually down -8.8% over the previous 12 months, lagging the broader market’s +15.8% acquire and Alphabet’s spectacular +74.1% rise.
Amazon is doing nice in its core companies, with its cloud unit having fun with accelerating development and popping out with one of the best development in three years. Revenues in Amazon Internet Companies (AWS) elevated +24% in 2025 This fall, which compares to year-over-year development charges of +20% in Q3, +19% in Q2, and +17% in Q1. Backlog for the enterprise elevated +40% from the identical interval final 12 months to $244 billion, with administration describing a sturdy demand setting.
Whereas Amazon stays the cloud chief, the Alphabet report confirmed accelerating momentum on the search big’s Google Cloud enterprise. Revenues for Google Cloud elevated +48% from the identical interval final 12 months in 2025 This fall, which compares to development charges of +35%, +32%, and +28% in Q3, Q2, and Q1, respectively. The robust cloud features at Amazon and Alphabet put the highlight on Microsoft’s lack of momentum on this key enterprise space.
At this stage within the This fall reporting cycle, Nvidia NVDA is the one Magazine 7 member that has but to report December-quarter outcomes. Nvidia is scheduled to report This fall outcomes on February 25th, with EPS and revenues for the interval anticipated to be up +70.8% and +66.7% from the identical interval final 12 months, respectively.
Combining the precise outcomes for the 6 Magnificent 7 members which have reported already with estimates for Nvidia, whole This fall earnings for the group are anticipated to be up +24.2% from the identical interval final 12 months on +18.9% greater revenues, which might comply with the group’s +28.3% earnings development on +18.1% income development in 2025 Q3.
The chart beneath exhibits the group’s blended This fall earnings and income development relative to what was achieved within the previous interval and what’s anticipated within the coming three durations.
Picture Supply: Zacks Funding Analysis
The chart beneath exhibits the Magazine 7 group’s earnings and income development image on an annual foundation.
Picture Supply: Zacks Funding Analysis
Please observe that the Magazine 7 group is on observe to usher in 26.6% of all S&P 500 earnings in 2026 and account for 33.5% of the index’s market capitalization.
The Magazine 7 group has been having fun with a steadily bettering earnings outlook, with analysts elevating their estimates. We noticed that development in play forward of the beginning of the Q3 earnings season, and one thing comparable is in place for the 2025 This fall interval as nicely.
The chart beneath exhibits how mixture earnings estimates for the Magazine 7 group have advanced since July 2025.
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This fall Earnings Season Scorecard
By Friday, February 6th, we have now seen This fall outcomes from 293 S&P 500 members or 58.6% of the index’s whole membership. Complete earnings for these corporations are up +14.1% from the identical interval final 12 months on +9.2% greater revenues, with 77.5% beating EPS estimates and 72% beating income estimates.
We have now greater than 500 corporations on deck to report outcomes this week, together with 77 index members. The week’s lineup features a mix of Tech operators like Spotify, Lyft, and Cisco, and conventional bellwethers like DuPont, Ford, Coca-Cola, BP, and others.
The comparability charts beneath put the expansion charges for these 293 index members with what we had seen from this similar group of corporations in different current durations.
Picture Supply: Zacks Funding Analysis
The comparability charts beneath put the This fall EPS and income beats percentages for this group corporations relative to what we had seen from them in different current durations.
Picture Supply: Zacks Funding Analysis
The comparability chart beneath places the This fall internet margins for the 293 corporations which have reported in a historic context.
Picture Supply: Zacks Funding Analysis
The Earnings Huge Image
The chart beneath exhibits the This fall earnings and income development expectations within the context of the place development has been within the previous 4 quarters and what’s anticipated within the coming 4 quarters.
Picture Supply: Zacks Funding Analysis
Estimates for the present interval (2026 Q1) have modestly moved up in current days, because the chart beneath exhibits.
Picture Supply: Zacks Funding Analysis
2026 Q1 estimates have elevated modestly for five of the 16 Zacks sectors for the reason that begin of January, together with Tech, Industrials, Retail, Utilities, and Enterprise Companies. On the destructive facet, Q1 estimates have come down for 10 of the 16 Zacks sectors, with the largest declines on the Vitality, Medical, and Client Discretionary sectors.
The chart beneath exhibits the general earnings image on a calendar-year foundation, with double-digit earnings development anticipated in 2025 and 2026.
Picture Supply: Zacks Funding Analysis
For an in depth take a look at the general earnings image, together with expectations for the approaching durations, please take a look at our weekly Earnings Traits report >>>>Earnings Outlook Improves: A Nearer Look
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Amazon.com, Inc. (AMZN) : Free Inventory Evaluation Report
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