I think Amazon grows EPS 100% in the next year – AMZN is LOCKED IN

Welcome to AI Collision 💥,

In today’s collision between AI and our world:

• Amazon smashes earnings… and slides lower in price
• AI for AWS pays off, later
• Classic kids

If that’s enough to get Amazon spending $100 billion, read on…

AI Collision 💥

Who are the “analysts” that cover stocks on Wall St?

I think they all need to be fired.

I say this because I want you to take a look at Amazon’s earnings per share (EPS) “beats” over the last four quarters.

On average its EPS was 23% higher than expectations from analysts on Wall St. I’m not even sure there are analysts on Wall St judging by how bad these expectations always seem to be. I think that’s just what’s said to make investors feel like someone’s doing something on Wall St.

That’s because it’s unbelievably obvious that companies like Amazon are growing their earnings and will continue to do so quarter on quarter… maybe forever. And you wanna know how they’re doing it? They’re utilising the technology they make to be more efficient, to generate more yield, to cut waste and deliver more tangible outcomes for customers.

To grow earnings per share.

A big part of this is the evolution of their machine learning, AI and soon to be AGI (artificial general intelligence). On the earnings call, Amazon CEO Andy Jassy even said:

On the CapEx [capital expenditure] side… we spent $26.3 billion in CapEx in Q4. And I think that is reasonably representative of what you could expect in the annualized CapEx rate in 2025. The vast majority of that CapEx spend is on AI for AWS.

Let’s just clear up something here.

Microsoft has said it’s going to spend $80 billion on AI capex this year. Amazon is saying it’s going to blow that out the water and spend around $100 billion. Meta is a little under – it’s only going to spend $65 billion (although I bet it’s more). Google has said it’ll be up around $75 billion.

That’s $320 billion this year, confirmed, from just four companies. I don’t about you but that gives me little butterflies in my stomach. Not the bad kind but the holy s*** kind when you realise just how world-changing this year is going to be, and that it also then bumps up again in 2026, and 2027, and 2028.

Also, you have to realise that capex spend on AI is a bit like firing tens of thousands of employees (as all of these companies did around two years ago).

You don’t see the tangible benefits of that payoff immediately – it takes a few quarters for that strategy move to pay off. We’re seeing that remnants of that now. But it’s this AI spend that’s going to pay off in, I’d say, around two years or so.

So if Amazon is growing EPS now and still going to drop hundreds of billions of dollars on AI in AWS to turn the entire internet, and digital world into an AI enhanced BEAST, you bet that payoff comes down the track.

But analysts’ expectations sank Amazon 4% in trading because revenue was exactly where they thought it would be.

Who cares! Gimme that EPS growth with full knowledge that even if Amazon keeps pace with revenue growth, as its AI winds up it’ll make 10%, 20% 30% efficiency gains and amplify that into its EPS growth year on year.

But let me paint this for you another way. Here’s what I wrote to all the Southbank editorial team earlier today:

Probably a great example of the state of the market right now. Amazon is pretty much on target “expectations” with revenues, but SMASHES the EPS ($1.86 vs $1.50 expected) and the stock falls 4% in after-market.

For me, I’d much rather see EPS growth of 86% year on year.

For what it’s worth, they still posted $28.7bn in rev for the qtr. They’re still gunna spend around $100 billion on AI this year too.

Front loading that capex while still growing EPS, yep, I’ll have a big chunk of that thanks.

That AI payoff comes in about 12 quarters time, probably sooner. Someone could write this down, but I think their Q4 earnings 2025 (reporting in 2026) will be close to $4 per share. They’ll grow EPS year on year 100% (minimum) from this quarter. 

Of course, that’s my view on it. We’ll take a look back at this in a year’s time and see how right (or wrong) I am about it.

But with the heavy investment into AI that Amazon is progressing with, along with custom silicon and quantum computing, this infrastructure juggernaut does not look like slowing down to me one bit.

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$6 Million Every Minute

Every minute, an average of $6 million is pouring into a specific area of the energy market.

That’s $3 trillion in total. An investment flow larger than anything we’ve seen in years.

James Allen has pinpointed three stocks that he believes could be the biggest winners of this boom.

Find out what they are before the mainstream catches on.

Capital at risk.

Boomers & Busters 💰

AI and AI-related stocks moving and shaking up the markets this week. (All performance data below over the rolling week).

Boom 📈

• BigBear.ai (NYSE:BBAI) up 68%
• Gorilla Technology Group (NASDAQ:GRRR) up 39%
• Arm Holdings (NASDAQ:ARM) up 10%

Bust 📉

• Cyngn (NASDAQ:CYN) down 74%
• Brainchip (ASX:BRN) down 15%
• Tesla (NASDAQ:TSLA) down 7%

From the hive mind 🧠

• The UK is quite literally a small island, with rivers and canals meandering through the entire country. The idea of it “running out of water” with the need to cool AI is the most ridiculous thing I’ve ever heard.
• This made me smile. It’s nice to see kids thinking about things like AI. My son even said to me the other day, “Hey Dad, if China and America are trying to win the AI competition, what about if they draw?”
• Didn’t take long to consider that DeepSeek was really Chinese DeepState spying on everyone, did it?

Artificial Polltelligence 🗳️

Weirdest AI image of the day

Classic Children’s Books – r/weriddalle

ChatGPT’s random quote of the day

Thanks for reading, and don’t forget to leave comments and questions below,

Sam Volkering

Editor-in-Chief

AI Collision