Amazon Q1 earnings preview: Can AWS and AI drive growth amid cost pressures?                 

Amazon Q1 earnings preview: Can AWS and AI drive growth amid cost pressures?

​Amazon is set to report its first-quarter 2026 earnings on 29 April after the US market close, with a conference call scheduled for later that evening. The update will be closely watched as a bellwether for global e-commerce demand, cloud computing growth and broader technology sector momentum.

​Analyst ratings​

​According to LSEG Data & Analytics analysts rate Amazon as a ‘buy’ with a mean long-term price target at $282.37, 11% above current levels (as of 24/04/2026).

​TipRanks has a Smart Score of ’10 Outperform’ for Amazon and its shares are seen as a ‘strong buy’.

Strong expectations driven by AWS and AI

​Heading into the release, market expectations remain robust reflecting optimism. Analysts forecast revenue to increase by close to 14% to $188 billion (by roughly 21% to $16.84 billion for advertising revenue) and earnings of around $1.63 per share, up from $1.59 in Q1 2025.

​A key driver is Amazon Web Services (AWS), which continues to benefit from accelerating demand for artificial intelligence infrastructure and cloud computing. Recent forecasts suggest AWS growth could reach mid-20% levels, supported by partnerships and enterprise adoption of AI workloads. 

​This segment remains Amazon's most profitable division and is likely to be the primary contributor to earnings growth in Q1 as AWS generates substantially higher margins than retail operations.

E-commerce and advertising remain resilient

​Alongside cloud, Amazon's core retail business is expected to show steady growth, particularly in North America, where marketplace activity and logistics efficiency have improved. Analysts anticipate continued expansion in online sales, supported by faster delivery times, Prime membership engagement and a stabilising consumer environment.

​The company's digital advertising business is also emerging as a key profit driver, benefiting from increased seller activity and higher-margin revenue streams tied to its marketplace ecosystem. 

Cost pressures and macro risks

​Despite strong top-line momentum, investors will be assessing how Amazon is managing cost pressures, particularly in logistics, labour and energy. The recent surge in oil prices - driven by the closure of the Strait of Hormuz - could increase shipping and fulfilment costs, potentially weighing on margins in the quarter.

​At the same time, broader macroeconomic uncertainty in the wake of the war in the Middle East remains a risk. Elevated interest rates and inflation could impact consumer spending patterns, particularly in discretionary categories, while currency fluctuations may affect international revenue.

​This sets a relatively high bar for the Q1 results, meaning that even a modest miss on expectations could trigger volatility.

What investors will watch on 29 April

​The Q1 update will be closely scrutinised for several key indicators determining market reaction:

• ​AWS growth rates and commentary on AI demand

• ​Retail sales trends across North America and international

• ​Advertising revenue growth and profitability

• ​Overall operating margins and cost management

​Investors will also focus on forward guidance, particularly any commentary on demand trends, cost pressures and capital expenditure linked to AI infrastructure.

What the results mean for investors

​Amazon enters its first-quarter earnings release with strong momentum across its core businesses, particularly in cloud computing and advertising. However, the combination of high expectations, rising costs and macroeconomic uncertainty creates a more nuanced outlook.

​If the company can deliver solid growth while maintaining margin discipline, it is likely to reinforce its position as one of the leading beneficiaries of the AI-driven technology cycle.

​Conversely, any signs of slowing cloud growth or increased cost pressures could weigh on sentiment after a strong run in the share price. 

Technical analysis of the Amazon share price

​The Amazon share price – up around 10% year-to-date and thus outperforming the Nasdaq 100 by around 4% - has this week briefly overcome its November 2025 record high at $258.60 by rising to $258.79. If overcome, a 261.8% Fibonacci extension of the December 2022 to September 2023 bull market, projected higher from the October 2023 low, at $286.71 will be in focus. Further up lies the psychological $300 mark.

​Amazon monthly candlestick chart

​On the daily chart the Amazon share price is trading in new record highs around last year’s $258.60 all-time high while being supported by the January-to-February highs.

​Amazon daily candlestick chart

In case of  minor support at the 16 April low at $244.20 giving way, a retracement towards the early December 2025 high at $238.97 may ensue, but while the 200-day simple moving average (SMA) at $226.20 underpins, the medium-term uptrend is deemed to be intact.

​The long-term uptrend will remain valid while the February low at $196.00 underpins.

How to trade or invest in Amazon

​Investors interested in Amazon exposure have several options. Here's how to approach participation:

​Research Amazon's latest results, competitive positioning and technology trends thoroughly. Understanding e-commerce and cloud computing dynamics helps inform decisions. Trading for beginners provides background.

​Choose whether you want to trade or invest in Amazon. Spread betting and CFD trading allow speculation on both directions.

​Open an account with broker offering US stocks including NASDAQ listings.

​Search for Amazon on your chosen trading platform; the company trades under the ticker AMZN.

​Place trades based on analysis and risk tolerance. Use stop-loss orders managing risk given volatility around earnings.

​Remember Amazon represents large-cap technology stock with execution risks. Maintain diversification across sectors whilst participating in trading growth technology companies.​​