Motley Fool contributor Daniel Sparks calls Amazon shares a buy at about $249, 12% below their Aug. 3 record close of $284.02, citing AWS's 37% year-over-year Q2 revenue growth as free cash flow swung to a $7.6 billion outflow over the trailing 12 months.
AWS revenue growth accelerated from 17.5% in Q2 2025 to 37% in Q2 2026, while operating income rose 64% to $16.6 billion. Amazon's backlog of contracted commitments not yet recognized as revenue, mainly tied to AWS, reached about $496 billion at June 30, up from about $195 billion a year earlier. Anthropic committed in April to spend more than $100 billion with AWS over 10 years.
Amazon's property-and-equipment spending, net of sales proceeds and incentives, reached about $169 billion over the trailing 12 months, versus about $103 billion a year earlier; Amazon attributed most of the increase to AI. On Aug. 31, the FTC and 22 state attorneys general sued Amazon over ad auctions. The complaint alleges Amazon described them as second-price but charged Sponsored Products advertisers their winning bid about 80% of the time by 2024. Amazon disputes the allegations, estimating its method saved advertisers over $8 billion in 2021–25. Shares traded at roughly 24 times expected 2027 earnings, versus 27 times at the record.
