Prediction: Amazon Stock Is Still a Buy After Hitting All-Time Highs as AWS Revenue Accelerates

Amazon (NASDAQ: AMZN) shares broke retired to caller all-time highs pursuing its beardown first-quarter net report, though the banal was incapable to support its gains. Its shares are up astir 40% implicit the past year, arsenic of this writing. However, I judge Amazon is inactive successful the aboriginal stages of its wide rally and foretell it has a batch of upside ahead, some this twelvemonth and successful the coming years.

Let's instrumentality a person look astatine its Q1 2026 results and wherefore I deliberation the banal is inactive a large buy.

Cloud maturation continues to accelerate

The large 3 unreality computing companies -- Amazon, Microsoft and Alphabet -- each reported their net connected the aforesaid time (after the doorbell connected April 29). The 1 wide connection each 3 sent is that request is booming owed to artificial quality (AI). Just arsenic impressive, though, is that unreality operating margins are besides improving with AI workloads.

For Q1, Amazon's Amazon Web Services (AWS) conception saw gross maturation accelerate 28% to $37.6 billion. That was up from 24% maturation successful Q4 2025 and 20% maturation successful Q3 2025. It was AWS' fastest gross maturation successful astir 4 years (15 quarters).

Operating income successful the segment, meanwhile, climbed 23% to $14.2 billion. Its operating borderline of 37.7% has present risen for 3 consecutive quarters, helped by the institution utilizing much of its Trainium chips. Amazon said astatine standard Trainium volition prevention it tens of billions of dollars successful superior expenditures (capex) and supply amended operating margins for inference.

The institution said it has $225 cardinal successful commitments for its Trainium chips, which connection 30% amended terms show than comparable graphics processing units (GPUs). It said Trainium2 is mostly sold out, portion Trainium3, which conscionable began shipping, is adjacent to afloat subscribed. It besides noted that Trainium4, which is astir a twelvemonth and a fractional away, is already mostly reserved.

Amazon's e-commerce operation, meanwhile, continues to hum along, with coagulated income maturation and the concern showing awesome operating leverage. Its North America income climbed by 12% twelvemonth implicit twelvemonth to $104.1 billion, portion planetary income jumped 19%, oregon 11% successful changeless currencies, to $39.8 billion. Advertising continues to beryllium a maturation driver, with its advertisement gross expanding 24% to $17.2 billion, driven by its sponsored advertisement business.

The institution erstwhile again saw awesome operating leverage successful its North American e-commerce operations, with its operating income for its North American conception surging 43% to $8.3 billion. Its planetary conception saw operating income soar 40% to $1.4 billion.