Amazon is set to announce its quarterly results today. According to a report in Bloomberg, all eyes will be on Amazon’s cloud business which is Amazon Web Services (AWS). The reason for the same is reported to be Microsoft. Software giant Microsoft plunged last week due in part to slowing growth at its key cloud-computing platform, Azure. The all-important growth statistic for Azure and other cloud services came in at 39%, below StreetAccount’s 39.4% consensus. Microsoft’s finance chief, Amy Hood, argued that the cloud result could have been higher if it had allocated more data center infrastructure to customers rather than prioritizing its in-house needs. “If I had taken the GPUs that just came online in Q1 and Q2 in terms of GPUs and allocated them all to Azure, the KPI would have been over 40,” she said.Amazon shareholders are said to be seeking catalysts for a stock that has been languishing for a while. Amazon was the worst performer among the Magnificent Seven tech giants in 2025, rising just 5.2%, and is up less than 1% to start 2026. By comparison, the Nasdaq 100 Index jumped 20% in 2025, while the S&P 500 Index gained 16%. On the positive side, Amazon stock is slightly outperforming both these this year, so far.
What makes Amazon’s Cloud revenue important
According to Bloomberg, Wall Street expects Amazon to report a 21% year-over-year increase in AWS revenue in the fourth quarter to $34.8 billion. For the company as a whole, analysts project a 13% jump in fourth-quarter revenue to $211.5 billion and an 8% increase in adjusted earnings per share to $2.40. While Amazon’s other revenue lines could cushion an AWS miss, the cloud business is still likely to command the most investor focus and scrutiny.David Miller, chief investment officer at Catalyst Funds, which holds Amazon shares in several portfolios, told Bloomberg, “It isn’t clear how much of Microsoft’s disappointment might be due to company-specific issues and how much might reflect an overall slowing in the cloud space.” He added, “If it’s the latter, that could carry over.”Microsoft’s aggressive AI-related capital expenditures, alongside the slowing Azure growth, made investors and analysts question when these investments will pay off more substantially. “It’s really about what’s already priced into the stock, and I think what was starting to price in for [Microsoft] was a higher growth rate, which is always a little dangerous,” said Melissa Otto, head of technology, media and telecommunications research at Visible Alpha. “We haven’t really seen Amazon moving up in the same way.”
