All eyes are on AWS ahead of Amazon earnings as Wall Street looks to see AI spending pay off

• Amazon will report Q1 earnings on Wednesday afternoon.
• Amazon Web Services' Q1 revenue growth will be a key metric to watch.
• Wall Street consensus is for 26% year-over-year growth in AWS revenues.

Amazon is set to report first-quarter earnings on Wednesday, and investors will be looking to see if the company's AI spending is paying off.

Wall Street will have its eyes on one part of its business most closely: Amazon Web Services, Amazon's top profit driver.

The firm is expected to spend $200 billion in 2026 on AI projects like data centers and chip development as it looks to use AI to improve the AWS user experience, write software, and improve data storage.

Investors will want to see progress in AWS revenue growth for proof that all of that cash being dumped into its AI buildout is delivering meaningful returns. In Q4 2025, AWS revenue rose by 24% year-over-year.

The stock has had a stellar month, rising 29% over the last 30 days. Year-to-date, it's up 14%, trading at around $260 a share.

Analysts expect net sales of $177.23 billion and earnings per share of $1.62.

Here's what Wall Street analysts say to watch for when the company reports on Wednesday afternoon.

RBC Capital Markets

The bank says AWS revenues will be a crucial metric to watch as investors seek for clues that all of Amazon's AI spending is paying off.

"We believe the 1Q26 print will be pivotal in demonstrating whether AWS can deliver acceleration sufficient to validate the $200B capex guide that exceeded all Street expectations," analyst Brad Erickson wrote in a client note on Monday. Erickson said Amazon bulls will be looking for at least 30% year-over-year growth in AWS revenues.

RBC has an "Outperform" rating on the stock, and a price target of $300 a share, implying 15% upside.

UBS

UBS is uber-bullish on AWS, and says it expects Amazon's cloud business to announce significant growth of 38% on revenues.

"Where we continue to diverge most meaningfully vs the Street is in the ramp in AWS revenue for 2026 — which currently remains at 38% (vs Street 26%), which then compounds into 2027," wrote analyst Stephen Ju in an April 23 note. "Our 2027 Operating Income estimate is hence ~39% higher than consensus, and we continue to believe that the Street will catch up to where we are now."

The bank has a "Buy" rating on the stock, with a price target of $304 a share.

Bank of America

Analyst Justin Post said he expects 28% AWS growth, and said that CEO Andy Jassy's comments on AI would drive the stock.

One stat to keep an eye out for is quarter-over-quarter profit margin growth for AWS, he said.

"In our view, the quarter will underscore strong demand for AWS and an improving technology position vs peers," Post wrote in a recent client note, adding, "but if incremental q/q AWS margins are low, concerns on capex returns could resurface."

Post also noted that Microsoft and Alphabet report earnings on Wednesday as well, meaning investors are likely to compare the tech giants' performance against each other.

BofA rates the stock a "Buy," and gives it a "price objective" of $298.

Morgan Stanley

The bank expects AWS revenue growth in the 29%-31% range, and will stay around 30% year-over-year growth for the rest of 2026.

Morgan Stanley has an "Overweight" rating on the stock, and a price target of $300.

Mizuho Americas

Analyst Lloyd Walmsley says to watch out for weaker operating income due to rising fuel costs, but that investors could look past it as a temporary cost increase.

Otherwise, he expects recent upbeat commentary on AI in the firm's quarterly shareholder letter, rising CPU demand, and a surge in valuations on the Magnificent Seven stocks to drive further upside.

"We increase our AMZN target to $325 (from $315), largely on peer group multiple expansion," Walmsley wrote in a note.