Amazon Climbs 5% as Upgrade Fuels Post-Earnings Rebound on AWS Strength; Walmart Rises 2%, Alphabet Edges Higher David Moadel Mon, November 2, 2026 at 11:57 AM EST 6 min read AMZN +4.62% GOOG +1.33% JPM +1.14% MSFT -0.19% WMT +2.37% Explore stocks on Coinbase Trading disclosure Trading disclosure The above button links to Coinbase. Yahoo Finance is not a broker-dealer or investment adviser and does not offer securities or cryptocurrencies for sale or facilitate trading. Coinbase pays us for certain activity generated through this link. Prices displayed are informational.
Amazon (AMZN) surged 5% after AWS revenue hit $46 billion with CEO Andy Jassy projecting over 40% growth through 2028, despite missing EPS estimates.
Alphabet (GOOGL) gained just 1% despite Google Cloud growing 103%, while Microsoft (MSFT) reported 48% Azure growth, and both companies saw capex surge sharply.
Amazon's free cash flow swung to a $42 billion outflow as JPMorgan projects capex hitting $395 billion in 2027 on accelerating AI infrastructure bets.
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Wall Street is warming back up to the cloud story at Amazon (NASDAQ:AMZN) after a rocky first reaction to its latest quarter. Amazon stock is at $251.77, up 5% in morning trading. That rebound follows the initial reaction to quarterly results that missed expectations. The gain also lifts Amazon stock to a 9% advance year to date.
Phillip Securities upgraded Amazon to Buy from Accumulate on November 2 and raised its price target to $330 from $320. The bulls see the bounce as dip-buying on accelerating Amazon Web Services (AWS) growth and a reassuring outlook, while skeptics keep returning to heavy AI spending and negative free cash flow.
Amazon reported Q3 2026 results on October 29, with earnings of $1.89 per share missing the $1.96 consensus estimate. AWS revenue reached $46 billion, and the unit's operating income came in at $17.8 billion. Against Amazon's total revenue of $201.9 billion and total operating income of $28.1 billion, AWS delivered the majority of group profit on a much smaller share of sales.
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On the earnings call, Amazon CEO Andy Jassy spoke. He said AWS demand remains "exceptionally strong" and pointed to "projected revenue growth rates of over 40% both in 2027 and in 2028." That outlook came after AWS growth accelerated for the sixth straight quarter to its fastest pace in nearly five years.
Amazon's trailing 12-month free cash flow swung to an outflow of $42.4 billion from an inflow of $14.8 billion a year earlier. A $94.8 billion year-over-year jump in Amazon's purchases of property and equipment drove most of that swing. The company said the increase primarily reflects AI investments. For 2026, Amazon estimated its capital expenditures (capex) at $220 billion.
Jassy noted on October 29 that the company would spend "meaningfully more" in 2027, without giving a number. JPMorgan Chase (NYSE:JPM) analyst Doug Anmuth now projects Amazon capex of $395 billion in 2027 and $476 billion in 2028. Anmuth argued that management's demand visibility gives Amazon the confidence to "invest even more aggressively in AI compute infrastructure."
That tension lies at the heart of the Amazon debate. Strong cloud profits are funding an expansion that's consuming cash faster than the business generates it, and all of that AI buildout has to be powered, cooled, and connected by somebody. We rounded up seven of those suppliers in a free AI infrastructure report.
Amazon's main retail rival is moving higher as well. Walmart (NASDAQ:WMT) stock is up 2% to $126.29. The overlap between the two companies stops at retail and e-commerce, since Walmart doesn't have a cloud business tied to the AWS story.
Alphabet (NASDAQ:GOOGL) is posting a smaller gain amid concerns about its own AI spending following its October 28 report. Alphabet stock is up 1% to $283.10. Revenue at Google Cloud grew 103%, but the company's capex rose 114% and its free cash flow turned negative. The market is rewarding Amazon's AWS profits even as it keeps ignoring Google's spending.
Microsoft (NASDAQ:MSFT), the closest hyperscaler comparison to AWS, reported 48% Azure revenue growth on October 28. Capex at Microsoft more than doubled in the quarter, and management said "Customer demand continues to exceed available supply."
Amazon combines e-commerce, advertising, subscriptions and the AWS cloud, and the current catalyst sits directly in AWS AI infrastructure, whereas Walmart runs a discount-store and grocery operation that leans on its stores as fulfillment hubs.
Google makes most of its money from search and YouTube ads, with Google Cloud as a fast-growing second engine. The closest match to AWS is Microsoft, which pairs enterprise software with Azure and carries no retail exposure.
Amazon now must show whether AWS demand keeps pace with a capex budget headed much higher in 2027. Accelerating cloud growth and an AWS backlog of $578 billion that management called well-diversified give bulls reason for confidence. The bear case is that negative free cash flow and rising debt leave Amazon less room for error if AI demand cools.
Beyond Amazon, the week brings the midterm elections and key economic data that could shift risk appetite across mega-cap tech. More clarity on Amazon's 2027 spending plan may be needed before the AI spending debate settles.
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