Amazon's Internal Forecast Points to $612 Million Device Loss as Analysts Look Past Spending Fears
Published on 10/27/2026 at 17:50 | Editorial boerse-global.de
Amazon's hardware division is bracing for a $612 million gross loss in 2026, according to an internal planning document from August cited in a media report. That figure overshoots management's own target of $438 million, and the disclosure lands just days before the company reports third-quarter results. Investors shrugged off the news: the stock climbed 2.0% on the session.
The planning document also flags rising memory costs and proposed cost cuts for Alexa+, with the savings described as suggestions rather than firm commitments. Alongside the device-unit shortfall, attention is fixed on AWS ahead of Thursday's earnings release, which Amazon will publish after the market close. A conference call is scheduled for 2 p.m. Pacific, 5 p.m. Eastern.
Cloud Demand Outruns Supply
Reuters expects AWS revenue growth of 38.2% for the September quarter, up from 36.8% in the prior period. The agency frames results from the largest technology companies as a test of whether cloud growth and cash generation can carry the industry's artificial intelligence spending — and ties the reassessment of AI infrastructure outlays and financing directly to Amazon's upcoming numbers.
Capacity is tight. CEO Andy Jassy said Friday, according to media reports, that AWS cloud capacity is largely sold out through the end of 2027, with significant commitments extending into the following year. Verizon moved to lock in access, announcing an agreement with AWS yesterday worth more than $2 billion for high-performance fiber connections serving AWS data centers and AI workloads.
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Not every infrastructure project is moving forward. Amazon has agreed in principle to withdraw its application for the former George Washington University campus in Loudoun County, Virginia, following local opposition, county officials said on October 20. The site is now slated to become predominantly mixed-use housing rather than data centers.
Analysts Split on the Spending Bill
UBS analyst Stephen Ju raised his price target on Amazon to $348 from $318 yesterday while keeping a buy rating, arguing that stronger AWS margins could offset AI-related cost pressure. His note addresses investor worries that capital expenditures could exceed $300 billion in 2027 and consume free cash flow entirely; Ju counters with the cloud unit's margin potential.
Morgan Stanley's Brian Nowak had already named Amazon a preferred pick on October 19, lifting his target to $350 from $335 and reaffirming an overweight rating, citing AWS growth among his reasons.
On the hiring front, Amazon said October 20 that it plans to bring on more than 300,000 US workers for the holiday season across seasonal, part-time and full-time roles. Eligible seasonal employees will receive health insurance from their first day of employment starting January 1, 2027.
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