Amazon (AMZN) stock spiked on Thursday, fueled by CEO Jassy’s shareholder letter revealing $15B in AWS AI annualized revenue and a $200B 2026 capex commitment for AI infrastructure.
Amazon’s acquisition talks with Globalstar (GSAT) would fortify Project Kuiper satellite internet against SpaceX’s Starlink, while Amazon Pharmacy’s same-day delivery of Eli Lilly’s (LLY) Foundayo GLP-1 pill taps a massive weight-loss market.
Amazon’s free cash flow fell 65.95% YoY in 2025 due to AI capex; the $200B 2026 spending commitment keeps the pressure elevated.
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Amazon (NASDAQ:AMZN) shares are up 5% in Thursday’s session, climbing from $221.25 to $232 as of midday. Multiple independent catalysts are landing simultaneously, each capable of moving the stock on its own.
CEO Andy Jassy’s annual shareholder letter is the primary driver of Amazon stock, but reports of acquisition talks with Globalstar (NASDAQ:GSAT) and a new pharmacy partnership with Eli Lilly (NYSE:LLY) are adding fuel. The bulls are reacting to a company building infrastructure that competitors can’t easily replicate.
READ: The analyst who called NVIDIA in 2010 just named his top 10 AI stocks
The headline from Jassy’s letter is striking. AWS AI services now carry over $15 billion in annualized revenue, a figure that caught many investors off guard. Jassy also disclosed that Amazon’s internal chip business exceeds $20 billion in value, with custom silicon like Trainium and Graviton growing at triple-digit percentages year over year.
Jassy didn’t shy away from the spending question. Amazon plans approximately $200 billion in capital expenditures for 2026, primarily directed at AI 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 backs up that confidence. Amazon’a dull-year 2025 revenue hit $716.92 billion, up 12.38% year over year, while AWS revenue grew 20% to reach $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 drawing serious attention. The potential deal would strengthen Project Kuiper, Amazon’s satellite internet initiative and direct challenger to SpaceX’s Starlink. As we explored in Amazon Is Ready to Take on Starlink in Space-Based Broadband, the company has been quietly building out low-earth-orbit capacity with serious intent.
Acquiring Globalstar’s satellite infrastructure would allow Amazon to internalize capacity rather than depend on third-party providers. That’s consistent with Jassy’s broader theme: own the stack, control the cost curve, and build moats competitors can’t replicate. Amazon’s Q1 guidance already bakes in roughly $1 billion in higher Amazon Leo satellite costs year over year, signaling that this buildout is accelerating regardless of the Globalstar outcome.
Amazon Pharmacy announced it will offer Eli Lilly’s newly approved oral GLP-1 weight loss pill, Foundayo, with same-day delivery. The service is available in nearly 3,000 cities now, with plans to expand to 4,500 locales by year-end. Unlike injectable alternatives, Foundayo doesn’t require refrigeration, making it well-suited for Amazon’s logistics network.
The pricing is designed to remove friction: as low as $1 per day with insurance, or $5 per day cash pay. Amazon Pharmacy will also offer Foundayo at kiosks inside One Medical primary care clinics, deepening the healthcare ecosystem Amazon has been assembling. The GLP-1 market is enormous, and same-day delivery of an oral weight loss medication is a genuine differentiator.
Wells Fargo maintains an Overweight rating on AMZN stock with a price target of $305, citing stable capital expenditure guidance and 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 upside from current levels.
The concerns about AMZN stock are real, however. Free cash flow declined sharply in 2025, falling 65.95% year over year, as Amazon poured capital into AI infrastructure. Amazon’s $200 billion capex commitment for 2026 will keep that pressure elevated, and some investors reasonably question whether the return timeline justifies 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 stock was down 4.15% year-to-date heading into today’s session, a reminder that this year hasn’t been a straight line higher.
The track record is hard to argue with, though. AMZN shares have handsomely rewarded long-term shareholders, which we detailed in If You Had Invested $1,000 in Amazon vs. Google 10 Years Ago, Here’s What You’d Have Now.
If you believe Jassy’s thesis that AI infrastructure is a generational investment, today’s catalysts read as confirmation. If you’re skeptical of the capex math, Amazon’s free cash flow decline is the number to watch. The next major checkpoint is Amazon’s Q1 earnings, where guidance of $173.5 billion to $178.5 billion in net sales will be put to the test.
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