Amazon Q1: $200B In FY26 CapEx For A $15B Run-Rate Story

The author downgrades Amazon (AMZN.OQ) to Hold ahead of its earnings print, arguing that a $200B FY26 capex plan is not justified by only $15B in AWS AI services ARR (about 10% of AWS run rate). The note calls for materially stronger AWS AI ARR growth over coming quarters and Q1 revenue meaningfully above the $36.8B consensus to validate the rich 34x forward P/E. The author also contrasts Amazon’s valuation with Alphabet (trading at ~29x) and says Google Cloud is growing faster. The piece suggests the upcoming results and guidance are likely to drive near-term share-price action and that a clear AWS beat could reverse the Hold view.