AWS Backlog Reaches $578B, Outpacing Amazon's Revenue Growth
Amazon's AWS backlog grew to $578 billion at triple-digit rates, while AWS sales rose 39.3% to $46 billion and shares fell over 7% after the earnings miss.
Amazon and Intel report earnings after the close; AWS growth and Intel's recovery in focus. Also reporting: Starbucks, Gilead, First Solar.
With the major indices trading modestly to sharply lower—the Nasdaq Composite (-1.59%) and Nasdaq 100 (-1.66%) leading the decline—several large companies, including Amazon and Intel, are set to report earnings after the close.
For technology investors, the key question is whether AI-driven growth is sufficient to justify the spending and sustain future profits and cash flow.
Consensus estimates differ modestly between providers. The comparisons below are based on current MarketBeat estimates versus the same quarter last year; EPS typically refers to the adjusted measure used by analysts, except for Amazon's reported earnings.
Amazon: AWS growth and the cost of delivering it
A year ago, the stock traded near $225; it now stands at $244.71.
The most closely watched figure may be Amazon Web Services revenue, expected in the range of $45.4 billion to $45.6 billion, versus about $33.0 billion a year ago. That would represent growth of roughly 38%, a significant acceleration from the 20% growth in last year's third quarter. Investors will also scrutinize AWS operating margins to assess how efficiently that growth converts into profit.
Another key focus is Amazon's roughly $220 billion capital-spending outlook. Robust cloud demand would be positive, but a further spending increase may keep attention on free cash flow. Holiday-quarter retail guidance, advertising growth, and fulfillment profitability will also influence the market's reaction.
An important note: Last year's $1.95 EPS included a $9.5 billion pretax gain from Amazon's Anthropic investments. Therefore, the roughly flat headline EPS forecast is not a clean gauge of underlying operating growth. Operating income, segment margins, and cash flow warrant close attention.
Intel: A stronger recovery is already expected
Intel's forecasts already anticipate a notable improvement. The company's own guidance projected revenue of $15.8 billion to $16.8 billion and adjusted EPS of $0.38, placing consensus above the revenue midpoint and above its earnings forecast. Intel Corporation
Investors will seek evidence that server processor demand can sustain the recovery, along with updates on manufacturing capacity, margins, and external foundry customers. The next-quarter outlook and tangible progress in the foundry business may carry more importance than a small earnings beat.
A year ago, the stock traded at $37.
Other notable releases:
Starbucks: Improving profits despite lower reported revenue
The revenue decline requires context: Starbucks' conversion of its China operations to a licensed joint venture lowers consolidated sales, rendering the headline comparison less indicative of customer demand.
Better indicators are U.S. comparable-store sales, transaction growth, and operating margins. Management had previously set a target of at least 6.5% U.S. comparable-sales growth for the quarter. Investors will also scrutinize fiscal 2027 guidance to determine if the turnaround can maintain momentum.
In terms of the technical setup, the key is whether companies deliver growth and surpass what the market has already priced in. Amazon faces high cloud expectations, while Intel is already anticipated to show a significant recovery.
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