Amazon (NASDAQ: AMZN), the world’s largest e-commerce and cloud infrastructure company, is set to report its second-quarter earnings on July 30.
Analysts expect the company’s revenue and earnings per share to rise 17% and 8%, respectively, year over year for the quarter.
The stock has stayed nearly flat year to date, leaving investors wondering whether now is the right time to buy ahead of the report.
Amazon generates most of its revenue from its e-commerce business, but the majority of its profits come from Amazon Web Services, known as AWS.
AWS is the world’s largest cloud infrastructure platform and controlled nearly a third of the cloud platform market last year, according to Canalys.
The e-commerce segment faces inflationary and competitive headwinds, but Amazon is addressing those challenges by regionalizing its fulfillment network and automating its warehouses.
The company is also adjusting third-party seller fees, selling more everyday essentials, and launching low-cost storefronts to strengthen its retail position.
AWS is growing rapidly as companies expand their cloud infrastructure to support the latest AI applications, hosting Bedrock and developing agentic AI tools alongside custom AI chips.
To support that expansion, Amazon plans to boost its capital expenditure from $131.8 billion in 2025 to $200 billion in 2026, even as it prunes its workforce.
That sharp increase in spending is pressuring margins and making top-line growth appear less impressive to cautious investors.
Amazon is also expanding its higher-margin advertising business, which sells integrated ads and promoted listings across its marketplace, to help offset that capex pressure.
The advertising segment could eventually become a secondary profit engine alongside AWS, providing additional diversification beyond the core retail and cloud operations.
For 2026, analysts expect Amazon’s revenue and EPS to grow 15% and 22%, respectively, with the stock trading at roughly 27 times forward earnings.
That valuation appears reasonably modest given the company’s long-term growth potential across cloud, advertising, and AI-driven services.
Any upward revisions to full-year capex guidance or warnings about the macro environment in the upcoming earnings report could cause the stock to pull back sharply.
Investors may find it prudent to wait for the broader market reaction before adding to positions, rather than jumping in immediately before the report.
The tug-of-war between bulls optimistic about long-term growth and bears focused on near-term spending pressures looks set to continue through the rest of the year.
