To The Moon

Earnings Calendar (26Oct2026)

Major earnings this week (Kimi compiled public calendars; Benson must confirm dates against his earnings calendar):

· Wednesday: Microsoft and Alphabet after the close

· Thursday: Amazon (AMZN) after the close — this week’s deep dive; Shell before the open

· The shared question: is heavy AI spending generating sufficient returns?

Amazon reports Thursday 29 October after the close; its call is at 5:00 pm ET. Figures come from the Yahoo Finance plugin and public sources. Profits are strong, but data-centre spending has sharply reduced free cash flow—cash left after capital investment.

Valuation and sentiment. Amazon closed Friday at US$248.00, up about 10.6% over twelve months, with a market value near US$2.7 trillion. Barchart reports roughly 20% over its 52-week window; the difference needs checking. The 52-week price range was US$196–US$287, showing large swings.

· The price-to-earnings (P/E) ratio is about 20 times reported earnings and 24 times expected earnings. The higher forecast ratio implies lower earnings per share, as AI costs and depreciation—the cost of ageing assets—affect profit.

· Among 56–58 analysts, the consensus is “strong buy”, with targets near US$329–332. The cited 27–34% upside needs checking against the US$248 share price, especially the lower end. Targets assume AI investment succeeds; they are forecasts, not guarantees. Yahoo Finance plugin data; Barchart via Yahoo Finance, 13 October

Demand — cloud, advertising and retail.

· Cloud: Amazon Web Services (AWS) Q2 revenue rose 37% annually to US$42.2 billion; outstanding orders approached US$500 billion. Deutsche Bank forecasts 41% growth this quarter. Management expects capacity below 2026 demand. The question is the cost of meeting demand. CNBC via BloFin preview

· Advertising and retail: Advertising revenue rose 26% to US$19.8 billion last quarter. North American retail’s profit margin was 7.9%, helped by US$640 million in one-off tariff refunds. Rising fuel costs could squeeze margins. These businesses help fund cloud investment. Amazon Q2 2026 via BloFin

Revenue and profit — the four-year picture (December fiscal year):

Revenue grew about 12% annually, and losses became US$77.7 billion in profit. But the roughly 17% net margin over twelve months includes one-off gains. Q2 pre-tax “other income” was US$53.4 billion, mainly from higher Anthropic investment values; earlier gains were US$16.8 billion in Q1 and US$9.5 billion in Q3 2025. The 13.7% operating margin better reflects the business. Separate operating profit from investment revaluations. Yahoo Finance plugin data; BloFin

Balance sheet. At end-2025: assets US$818.0 billion, liabilities US$407.0 billion, equity US$411.1 billion and debt US$153.0 billion. Debt-to-equity is about 0.37 times, or 0.46 times including leases; the lease-inclusive US$252 billion figure needs checking. Credit quality is comfortably investment-grade. Unlike some AI projects using separate financing companies (SPVs), Amazon can fund investment from its own cash. Cash flow, rather than financial strength, is the concern. [Yahoo Finance plugin data]

Cash flow — the heart of this week’s story.

· Operating cash rose from US$46.8 billion in 2022 to US$84.9 billion in 2023, US$115.9 billion in 2024 and US$139.5 billion in 2025.

· Spending on long-term assets (capital expenditure) was US$63.6 billion, US$52.7 billion, US$83.0 billion and US$131.8 billion, respectively. About US$220 billion is indicated for 2026.

· Free cash flow was −US$16.9 billion, US$32.2 billion, US$32.9 billion and US$7.7 billion, respectively. At a US$2.7 trillion market value, Amazon trades above 300 times free cash flow, or about 19 times operating cash flow.

· Profit is not available cash. Heavy data-centre investment could pay off through AI growth; weak returns would leave little cash supporting about 20 times trailing earnings. Watch Thursday’s spending guidance. A report last week said Amazon was moving US$8 billion of Nvidia chips into a lease-back SPV, a separate financing company. Yahoo Finance plugin data; Seeking Alpha preview, 20 October

Recent news (compiled by Kimi).

· Q2 (July): US$200.6B revenue beat forecasts; AWS +37%. Reported EPS was US$5.75, including US$3.78 from Anthropic value gains. Adjusted EPS of US$1.97 also beat. Shares rose ~15% next day.

· September: a US$1B+ multi-year Synopsys deal to develop custom chips faster and reduce Nvidia costs.

· August: the FTC and 22 states sued over ad auctions; Amazon called it “misguided”. Amazon Leo satellite internet missed its mid-2026 service target. BloFin, Barchart via Yahoo

What to watch Thursday. Analysts expect EPS of US$2.01–2.02 and revenue of US$202.1 billion, up 12.2%. Company guidance is US$197–202 billion in sales and US$22.5–26.5 billion in operating income; revenue forecasts sit slightly above the range. Watch: (1) “other income”—Anthropic value changes can distort EPS, especially without a new funding valuation; (2) AWS growth against 37%; (3) 2026 capital spending; and (4) Q4 guidance, often more important for shares than current results. Options suggest a 5% move; three of four recent reports produced moves above 5%. This is an educational case study, not financial advice. Do your own due diligence. Zacks via BloFin

@TigerStars

$Amazon.com(AMZN)$