Amazon July 27

Rating Company Date 27 July 2026 Buy Amazon North America Reuters Bloomberg Rating Buy AMZN.OQ AMZN US Price target (USD) 315.00 United States Price at 24 Jul -week range 274.99 – 28.77 TMT Internet Valuation & Risks

2Q26 Earnings Preview: Potential upside to OI and AWS revenue Benjamin Black, CFA Research Analyst For AMZN's 2Q26 earnings, we anticipate results near the high end of Kunal Madhukar, CFA management's revenue guidance and above consensus, supported by a Research Analyst combination of resilient e-commerce trends, accelerating AWS growth, and continued strength in advertising. Importantly, our checks suggest AWS demand remains a meaningful source of upside. We forecast AWS revenue growth of 33% Raymond Wong Research Associate y/y in 2Q26, accelerating from 28% in 1Q26, with further acceleration to 34% in Q26. Our estimates are approximately 1-2% ahead of consensus in both quarters, though we believe buyside expectations are closer to 35-36% AWS Benjamin Hui, Esq. growth in 2Q. Recent indicators around new commitments, consumption growth, Research Associate inference demand, and AI capacity deployments suggest AWS momentum

Across the broader business, e-commerce trends improved through the quarter and accelerated meaningfully around Prime Day. Given Prime Day occurred in 2Q this year versus 3Q last year, we believe the Street has underappreciated the timing benefit to 2Q results and the corresponding demand pull-forward impact on 3Q. We forecast online store revenue growth of 15% in 2Q and 5% in 3Q, above consensus for 2Q and below consensus for 3Q. While the quarter's Prime Day benefit is widely recognized, we believe the magnitude of the resulting 3Q headwind remains underappreciated. At the same time, our advertising checks remain constructive, indicating growth is being supported by both retail media and performance CTV, while Amazon continues to gain share through its closed- loop advertising ecosystem and the growing adoption of Amazon DSP.

We expect reported results to land near the high end of management's revenue guidance and approximately 1% above consensus, while operating income has the potential to be a more meaningful source of upside. Our current forecast is 2- 3% above the high end of management's operating income outlook and roughly 2% above Street estimates, though given the strength of AWS and advertising trends we believe the setup supports the potential for a mid-single-digit operating income beat. Beyond the quarter, capex remains one of the most important investor debates. While AMZN's current guide for 2026 capex is ~$200bn, investors increasingly appear focused on whether management may raise that outlook following Alphabet's increased capex. Looking ahead to 2027, buyside expectations have moved toward the low $300bn range versus consensus near $235bn. We have raised our own 2027 capex estimate to

Deutsche Bank Securities Inc. IMPORTANT RESEARCH DISCLOSURES AND ANALYST CERTIFICATIONS LOCATED IN APPENDIX 1. Deutsche Bank does and seeks to do business with companies covered in its research reports. Thus, investors should be aware that the firm may have a conflict of interest that could affect the objectivity of this report. Investors should consider this report as only a single factor in making their investment decision.

~$300bn and remain open to the possibility that FY26 spending ultimately lands modestly above the current $200bn framework.

All in all, we modestly lower our 2026 EPS by 0.5% and raise our 2027 estimate by ~2%. Additionally, we reiterate our Buy rating and our target price remains at $315. Our TP is derived by a blended approach that uses both a SOTP model and a 30x GAAP EPS multiple on 2027 estimates. For our SOTP model, we comp the Amazon Retail business to large retailers and AWS business against large software and cloud providers. We believe AWS is a clear winner in the generative AI computing paradigm shift and the multiple should reflect this.

2Q e-commerce trends improve due to Prime Day; 3Q could have some downside risk Data from Second Measure along with Sensor Tower DAU growth imply improving trends for Amazon from its guidance date through the end of the quarter.…