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Amazon (AMZN) shares soared on Thursday, boosted by CEO Jassy’s shareholder letter revealing $15 billion in annualized AI revenue from AWS and a $200 billion capital spending commitment by 2026 for AI infrastructure.
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Amazon’s acquisition talks with Globalstar (GSAT) would strengthen Project Kuiper’s satellite internet against SpaceX’s Starlink, while Amazon Pharmacy’s same-day delivery of Eli Lilly’s (LLY) Foundayo GLP-1 pill taps into a massive weight loss market.
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Amazon’s free cash flow fell 65.95% YoY in 2025 due to AI capex; The spending commitment of $200 billion by 2026 keeps the pressure high.
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Amazon (NASDAQ:AMZN) shares rose 5% in Thursday’s session, rising from $221.25 to $232 at midday. Multiple independent catalysts are landing simultaneously, each capable of moving the stock on its own.
CEO Andy Jassy’s annual letter to shareholders is the biggest driver of Amazon stock, but reports of acquisition talks with global star (NASDAQ:GSAT) and a new pharmaceutical partnership with Eli Lilly (NYSE:LLY) are adding fuel. The bulls are reacting to a company that builds infrastructure that competitors cannot easily replicate.
READ: The analyst who called NVIDIA in 2010 just named its top 10 AI stocks
The headline of Jassy’s letter is surprising. AWS AI services now generate more than $15 billion in annualized revenue, a figure that took many investors by surprise. Jassy also revealed that Amazon’s internal chip business exceeds $20 billion in value, and that custom silicons like Trainium and Graviton are growing at triple-digit percentages year over year.
Jassy did not shy away from the issue of spending. Amazon plans approximately $200 billion in capital spending by 2026, primarily aimed at artificial intelligence infrastructure. He dismissed concerns about an AI bubble, framing this moment as a “once-in-a-lifetime inflection” and projecting substantial future revenue and free cash flow expansion.
The underlying business supports that confidence. Amazon’s revenue in 2025 reached $716.92 billion, up 12.38% year-over-year, while AWS revenue grew 20% to $129 billion for the full year. In Q4 2025 alone, AWS posted $35.58 billion in revenue, its fastest growth in 13 quarters at 24% year-over-year.
Reports that Amazon is in acquisition talks with Globalstar are attracting a lot of attention. The potential deal would strengthen Project Kuiper, Amazon’s satellite internet initiative and direct rival to SpaceX’s Starlink. As we explore in Amazon is ready to take on Starlink in space broadband, the company has been quietly building capacity in low Earth orbit with serious intentions.
Acquiring Globalstar’s satellite infrastructure would allow Amazon to internalize capacity rather than relying on third-party providers. This is consistent with Jassy’s broader theme: own the stack, control the cost curve, and build moats that competitors can’t replicate. Amazon’s first-quarter guidance already calls for roughly $1 billion in higher Amazon Leo satellite costs year-over-year, indicating that this buildout is accelerating regardless of Globalstar’s outcome.
Amazon Pharmacy announced it will offer Eli Lilly’s newly approved GLP-1 oral weight loss pill, Foundayo, with same-day delivery. The service is now available in nearly 3,000 cities, with plans to expand it to 4,500 locations by the end of the year. Unlike injectable alternatives, Foundayo does not require refrigeration, making it well suited for Amazon’s logistics network.
Pricing is designed to eliminate friction: as little as $1 per day with insurance, or $5 per day with cash payment. Amazon Pharmacy will also offer Foundayo at kiosks inside One Medical primary care clinics, deepening the healthcare ecosystem Amazon has been building. The GLP-1 market is huge and same-day delivery of an oral weight loss medication is a true differentiator.
Wells Fargo maintains an Overweight rating on AMZN stock with a $305 price target, citing stable capex guidance and the potential for higher free cash flow as AI infrastructure matures. JPMorgan and Bank of America Securities also maintain positive ratings, with consensus pointing to significant improvement from current levels.
However, concerns about AMZN stock are real. Free cash flow declined sharply in 2025, falling 65.95% year over year, as Amazon poured capital into AI infrastructure. Amazon’s $200 billion capital spending commitment by 2026 will keep that pressure elevated, and some investors reasonably question whether the payback timeline justifies the near-term cash burn.
Rising fuel costs could also pressure margins in the retail segment, which still generates the majority of Amazon’s revenue by volume. Amazon shares were down 4.15% year-to-date heading into today’s session, a reminder that this year hasn’t been a straight line to the upside.
However, it is difficult to argue with the record. AMZN stock has rewarded long-term shareholders handsomely, as we detailed in If You Had Invested $1,000 In Amazon Versus Google 10 Years Ago, Here’s What You’d Have Now.
If Jassy’s thesis that AI infrastructure is a generational investment is to be believed, today’s catalysts are interpreted as confirmation. If you’re skeptical of the capex math, Amazon’s declining free cash flow is the number to watch. The next major checkpoint is Amazon’s first-quarter earnings, where guidance of between $173.5 billion and $178.5 billion in net sales will be tested.
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