What Could Derail Amazon Stock?

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Amazon.com (AMZN) stock returned 6.7% over the year to November 4, 2026, against 14.9% for the S&P 500. Holders waiting for the stock to catch up may be counting on AWS, Amazon’s cloud business, which grew at its fastest pace in nearly five years in the third quarter. Yet on the October 29 call, management also pointed to pressure on the cloud’s margins. Where does that pressure come from?

Amazon Says Its AI Sales Carry Lower Margins

The pressure comes from the AI business inside AWS. Asked about AWS margins over the next two years on the October 29 call, management said the outsized growth of AI puts margin pressure on the business as a whole, because AI earns lower margins. AI is also growing faster than the rest. Management said AI revenue was growing at triple digits from a year earlier, while AWS as a whole grew 39.3% in the third quarter.

On the same call, management named a…