Amazon Q1 Preview: AI Infrastructure Spend and Geopolitical Headwinds in Focus

Amazon is scheduled to release its first-quarter financial results after the market close on Wednesday. Wall Street analysts expect total revenue to increase by 14%, an acceleration from the 8.6% growth seen a year prior. The primary catalyst for investors will be the cloud division, AWS, where revenue is projected to jump approximately 26% year-over-year. This earnings cycle marks the first time the major hyperscalers—including Microsoft, Alphabet, and Meta—will update the market on capital expenditures since the outbreak of the U.S.-Iran war in February. The conflict has disrupted global supply chains and spiked oil prices, leading Amazon to introduce a 3.5% fuel surcharge for select third-party sellers to offset rising costs. To maintain its competitive edge in artificial intelligence, Amazon has aggressively scaled its spending. The company projected that capital expenditures will reach $200 billion in 2026, a figure that exceeds analyst expectations by more than $50 billion. CEO Andy Jassy recently disclosed that the AI revenue run rate for AWS hit $15 billion in the first quarter, supported by strategic investments in OpenAI and Anthropic. Beyond AI, Amazon is investing heavily in its 'Leo' satellite internet service, aiming for commercial launch in mid-2026. This effort includes the $11.57 billion acquisition of Globalstar and a race to meet FCC orbital deadlines. Despite these massive investments, the company continues to reduce its corporate headcount, announcing 16,000 layoffs at the start of the quarter following 14,000 cuts in October.