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Diamond or Dud?

The weekly showdown where investors decide if controversial stocks are hidden gems or complete trash

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Diamond or Dud is for entertainment purposes only. AssetRoom does not provide financial advice. Figures collected prior to poll publication.
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Why we're voting on AMZN this week

Between July and September, Amazon spent $75.9 billion on capital projects, most of it on AI data centers. That’s roughly $825 million a day. The full-year total is on track for about $220 billion.

AWS revenue grew 39.3% to $46 billion last quarter, its fastest growth in nearly five years, and the backlog of committed contracts reached $578 billion. Amazon’s overall operating margin hit a record 13.9%.

Over the past twelve months, free cash flow was negative $42.4 billion. A year earlier it was positive $14.8 billion. EPS of $1.89 also missed the $1.96 analysts expected, and shares fell about 7% after the report.

CEO Andy Jassy says demand still outstrips capacity and AWS can grow more than 40% a year through 2028. He’s asking shareholders to trust the backlog while the cash goes out the door.

AMZN
Amazon
Poll Closes In
d h m s
New poll every Friday
2026 Capex
~$220B
Market Cap
~$2.4T
Aws Revenue Growth
39.3%
Trailing Free Cash Flow
-$42.4B

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Diamond Case
  • AWS grew 39.3% to $46 billion with $578 billion in committed backlog. Operating income was $17.8 billion at a 38.7% margin, roughly 63% of Amazon’s total profit. Jassy said on the earnings call that demand still outpaces what Amazon can build, and guided for growth north of 40% in both 2027 and 2028.
  • Amazon posted a 13.9% operating margin, its highest ever. Operating income was $28.1 billion, up 61% from $17.4 billion a year ago and above the top of Amazon’s own $22.5-26.5 billion guidance range. Advertising brought in $19.6 billion last quarter, at margins well above the retail operation. The retail side of the business is finally making money on its own.
  • The $220 billion in capex is building long-lived assets. Data centers generate returns for 15 to 20 years, and the $578 billion AWS backlog is already more than two and a half times this year’s entire capex budget. Microsoft and Alphabet are each spending over $175 billion this year on the same infrastructure bet. If AI compute becomes a three-player market, the early spend is the moat.
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Dud Case
  • Trailing free cash flow swung from positive $14.8 billion to negative $42.4 billion in twelve months. Quarterly capex of $75.9 billion came in well above what analysts expected. Amazon kept its full-year guidance at $220 billion, but Jassy already raised it from $200 billion in July. There is no sign of the spending slowing down.
  • Revenue of $201.9 billion missed estimates, and EPS of $1.89 came in below the $1.96 consensus. Part of the year-over-year earnings decline came from a $9.5 billion Anthropic-related gain in last year’s Q3 that didn’t repeat. Q4 revenue guidance of $240 to $247 billion has a midpoint roughly in line with what analysts already expected.
  • AWS is growing at 39%, but Microsoft Azure reported 48% growth in the same period. Google Cloud also accelerated. The competitive moat in cloud is narrower than it was three years ago, and all three hyperscalers are locked in a capex arms race with no clear finish line. Spending $220 billion to defend market share is a different thesis than spending $220 billion to build something no one else can.
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Diamond Case
  • AWS grew 39.3% to $46 billion with $578 billion in committed backlog. Operating income was $17.8 billion at a 38.7% margin, roughly 63% of Amazon’s total profit. Jassy said on the earnings call that demand still outpaces what Amazon can build, and guided for growth north of 40% in both 2027 and 2028.
  • Amazon posted a 13.9% operating margin, its highest ever. Operating income was $28.1 billion, up 61% from $17.4 billion a year ago and above the top of Amazon’s own $22.5-26.5 billion guidance range. Advertising brought in $19.6 billion last quarter, at margins well above the retail operation. The retail side of the business is finally making money on its own.
  • The $220 billion in capex is building long-lived assets. Data centers generate returns for 15 to 20 years, and the $578 billion AWS backlog is already more than two and a half times this year’s entire capex budget. Microsoft and Alphabet are each spending over $175 billion this year on the same infrastructure bet. If AI compute becomes a three-player market, the early spend is the moat.
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Dud Case
  • Trailing free cash flow swung from positive $14.8 billion to negative $42.4 billion in twelve months. Quarterly capex of $75.9 billion came in well above what analysts expected. Amazon kept its full-year guidance at $220 billion, but Jassy already raised it from $200 billion in July. There is no sign of the spending slowing down.
  • Revenue of $201.9 billion missed estimates, and EPS of $1.89 came in below the $1.96 consensus. Part of the year-over-year earnings decline came from a $9.5 billion Anthropic-related gain in last year’s Q3 that didn’t repeat. Q4 revenue guidance of $240 to $247 billion has a midpoint roughly in line with what analysts already expected.
  • AWS is growing at 39%, but Microsoft Azure reported 48% growth in the same period. Google Cloud also accelerated. The competitive moat in cloud is narrower than it was three years ago, and all three hyperscalers are locked in a capex arms race with no clear finish line. Spending $220 billion to defend market share is a different thesis than spending $220 billion to build something no one else can.
Read our AI summaries of AMZN's quarterly and annual reports

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$AMZN - Diamond or Dud?

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