Amazon Web Services is firing on all cylinders. The cloud division’s revenue jumped 28% in the first quarter of 2026 — the strongest clip in 15 quarters — pushing its annualised run rate to $150 billion. That acceleration is fuelled by enterprises hungry to deploy generative AI while keeping control over their data, a demand Amazon aims to capture with its newly unveiled Claude Apps Gateway, a self-hosted solution for managing access to AI applications.
The gateway’s launch is no sideshow. It plugs directly into the broader infrastructure play that has Amazon targeting roughly $200 billion in capital expenditure this year, much of it channelled into data centres, custom chips, and the Nvidia GPUs that power large language models. To help finance that buildout, the company announced a $25 billion bond issuance on July 7, structured in eight tranches — a clear signal that management sees the AI arms race as a winner-take-most contest against Google, Microsoft, and Meta.
Consumer AI also gets a major upgrade
On the consumer side, Amazon is preparing its most expensive Alexa overhaul to date. An internal project codenamed Moonraker, detailed in planning documents dated July 8, is expected to cost more than $100 million in GPU expenses alone this year. The system relies on hundreds of Nvidia graphics processors and Anthropic’s Sonnet model to transform Alexa from a simple voice assistant into an autonomous agent capable of handling multi-step requests, logical reasoning, and visual responses.
The ambition is clear: turn Alexa into a thinking helper rather than a glorified timer. Engineers are currently testing advanced reasoning and visual features ahead of a broader rollout. If successful, Moonraker could help Amazon close the gap with rivals that have already embedded generative AI into their assistants — but the investment also raises the bar for proving that the spending translates into measurable user engagement or incremental revenue.
Should investors sell immediately? Or is it worth buying Amazon?
Stock treads water while fundamentals strengthen
Against this torrent of spending, Amazon’s share price has been marking time. The stock changed hands at €212.30 on the latest session, down 0.59% on the day. That leaves it roughly 10.8% below the 52-week high of €238.05 reached on May 5. The 50-day moving average of €219.17 sits above the current price, while the 200-day average of €200.93 provides a floor. The RSI of 49.7 points to a neutral reading, and the distance from the 52-week low of €165.88 — set on February 17 — has widened to 28.74%.
Analysts remain squarely bullish. TD Cowen and Goldman Sachs reiterated buy ratings this week, and the consensus view on Wall Street is a strong buy with a median price target well north of the current level. The annualised volatility of roughly 30.56% is typical for a tech giant of Amazon’s heft.
AWS still carries the heaviest weight in the investment thesis. With operating income of $23.9 billion in the first quarter and a margin of 13.1%, the cloud unit is both the growth engine and the profit engine. The new Claude Apps Gateway is a tactical move to lock in enterprise customers who want the flexibility of hosting their own AI workloads. Combined with the scale of Amazon’s infrastructure bets — from the $100 million Moonraker project to the $200 billion capex program — the company is banking that today’s heavy outlays will underpin tomorrow’s cloud dominance. Investors will get the next quarterly update later this month, and all eyes will be on whether AWS can sustain that 28% growth rate.
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