Amazon’s shares ended last week with a modest 2.10% bounce to €203.90, but the underlying picture remains fraught. The e-commerce and cloud giant is confronting a two-front regulatory squeeze — Brussels is tightening its grip on AWS under the Digital Markets Act, while Washington has revived the threat of punitive tariffs linked to European digital services taxes. Against this backdrop, the first Prime Day held in June delivered a contradictory set of numbers that left investors parsing household-level weakness beneath strong aggregate sales.
EU Regulators Zero In on AWS
The European Commission has taken preliminary steps to designate Amazon Web Services and Microsoft Azure as “gatekeepers” in cloud computing under the DMA. While neither service meets the quantitative thresholds typically required for such a label, Brussels argues they function as essential access points for businesses and consumers in the EU. The Commission specifically identifies AWS as the region’s largest cloud provider.
A formal gatekeeper designation would impose a series of obligations: prohibitions on self-preferencing, requirements for data portability, and interoperability standards. The Commission has also flagged that AI tools and partnership strategies influence cloud purchasing decisions, signalling a potential expansion of DMA oversight into cloud infrastructure — a significant shift in EU competition policy.
Amazon disputes the characterisation, contending that European customers already enjoy ample choice in cloud providers. The company also argues that DMA regulation would overlap with the existing EU Data Act. Amazon has said it will cooperate with the Commission ahead of a final decision, which is expected in the coming months.
The stakes are high: AWS is Amazon’s primary profit engine. In the first quarter of 2026, the cloud unit grew 28% to $37.6 billion in revenue, while the broader group reported total sales of $181.5 billion and operating income of $23.9 billion. Any regulatory curbs on AWS’s ability to bundle services or lock in customers — particularly as AI drives cloud demand — would strike directly at the heart of its business model.
Prime Day: Headline Growth, Frugal Households
Amazon’s decision to move Prime Day from its traditional July slot to June 22–26 produced robust top-line numbers. Adobe estimated that US consumers spent $8.3 billion on the first day alone, up 5% year on year, and projected total four-day spending of $26.3 billion — roughly 9% growth.
But the per-household data tell a more cautious story. The average household spent $143.45, down from $156.37 in 2025. The average order value fell to $47.66 from $53.34. Nearly 70% of items purchased cost less than $20, and only 3% exceeded $100. Customer satisfaction with the discounts slipped to 59% from 68%, with marketing firm PMG noting shallower price cuts than last year. Amazon itself declined to release specific revenue figures, simply stating it was “pleased with the positive customer response.”
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The retail side of the business still faces margin pressure even as AWS provides the bulk of profit. The juxtaposition underscores why regulatory and trade risks around the cloud are so closely watched.
Digital Services Tax: Trump’s 100% Tariff Threat
Just before the weekend, President Donald Trump escalated a long-running dispute by threatening a 100% tariff on imports from any country that imposes a digital services tax on US tech giants. Roughly half of European OECD members have already enacted, announced, or proposed such taxes, which target large platforms with limited physical presence — precisely the model underpinning Amazon, Meta, and Alphabet.
DSTs were excluded from the EU-US trade agreement reached in May, which capped most tariffs on European exports at 15%. The unresolved tax issue remains a flashpoint. The European Commission responded swiftly: spokesman Olof Gill called unilateral trade measures “unjustified” and warned that the EU would “react quickly and resolutely.” He argued the digital levy is non-discriminatory because it applies to all large corporations regardless of origin.
It remains unclear on what legal authority Trump could impose the threatened tariffs. The Supreme Court earlier this year struck down his sweeping global tariff powers, casting doubt over the enforceability of such measures.
Stock Technicals and the Q2 Crossroads
Amazon’s stock is clinging to support. The share price of €203.90 sits just 2% above its 200-day moving average of €199.98, while the 50-day average of €220.28 is well out of reach. The relative strength index of 40.9 suggests a mildly oversold condition, and with 30-day annualised volatility running near 31%, fresh headlines from either Brussels or Washington could trigger sharp moves.
All eyes are now on second-quarter results, due after the US market close on July 30. Amazon has guided for net sales between $194 billion and $199 billion — a range that assumes Prime Day landed in Q2 for most major markets. Operating income is expected to fall between $20 billion and $24 billion. The bar is high after Q1 earnings per share of $2.78 trounced analyst estimates of $1.64 by nearly 70%.
Whether the stock can hold its footing depends on two unknowns: whether EU cloud regulation stays manageable compliance or becomes a structural drag, and whether the digital tax fight escalates into real trade action. The answer to both should become clearer before 2026 is out.
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