Technology / Semiconductor / Internet Research

Nicolas Baratte

Nicolas Baratte has been a financial analyst since 2000, covering the Semiconductor sector and Global Technology. Nicolas has worked on the sell-side for JPMorgan, CLSA. On the buy-side for a Tiger fund and Prudential. Nicolas has covered semiconductors, Asian hardware and components, and the Global Tech supply chain. Nicolas lives mostly in Taiwan, sometimes in France and is in New York regularly.

Hyperscalers’ Cloud Revenue and Capex Update

AMZN 3Q25: Very Good 3Q as AWS Revenue Accelerates to 20% YoY. AWS Data Center Capacity to Double

MSFT 1Q26 (Sept-25): A Huge Quarter. AI Demand Is Accelerating

Equity Bottom-Up

<ul>
<li>4Q25 inline with expectations. 1Q26 revenue inline, Operating Profit lower due provisions. AWS growth accelerating to 24% (19% year ago). eCommerce &amp; the rest accelerating to 12% (9% year ago).</li>
<li>2025 Capex $132bn 18% of revenue. 2026 Capex $200bn ~25% of revenue. Same as other hyperscalers, Amazon say that capacity is sold out, need more Capex, can’t add fast enough.</li>
<li>Consensus at reasonable levels ~20% EPS growth. Valuations average at 28x 2026 EPS. Low expectations and valuations risks. The problem is sentiment: some much Capex, not enough growth.</li>
</ul>


4Q25 inline with expectations. 1Q26 revenue inline, Operating Profit lower due provisions. AWS growth accelerating to 24% (19% year ago). eCommerce &amp; the rest accelerating to 12% (9% year ago).
2025 Capex $132bn 18% of revenue. 2026 Capex $200bn ~25% of revenue. Same as other hyperscalers, Amazon say that capacity is sold out, need more Capex, can’t add fast enough.
Consensus at reasonable levels ~20% EPS growth. Valuations average at 28x 2026 EPS. Low expectations and valuations risks. The problem is sentiment: some much Capex, not enough growth.


AMZN: Results / Guidance Inline. Capex Up. Positive Messages and Negative Market Reaction?