Published on May 3, 2026
Amazon has experienced substantial growth, reporting net sales of $181.5 billion in the first quarter of 2026. This represents a 17% increase year over year, far surpassing analyst projections. Net income soared to $30.3 billion, nearly double the amount from the previous year.
However, a significant portion of this success hinges on a $16.8 billion paper gain from its investment in AI startup Anthropic. While some celebrate the earnings per share at $2.78, above the consensus of $1.64, the underlying factors tell a more complicated story. Analysts have begun scrutinizing the sustainability of such growth, particularly when accounting for the inflated paper profits.
This hefty gain has raised questions about Amazon’s core business performance, especially in its AWS division, which remains a critical revenue driver. Critics argue that relying on unrealized gains could signal vulnerability in the company’s long-term strategy. As investors digest these numbers, attention turns to whether this quarter’s gains are a sign of genuine growth or merely a fleeting financial facade.
The consequence of this situation is twofold. First, investor sentiment may shift as the focus centers on the viability of Amazon’s growth models. Second, the reliance on paper gains could lead to a reevaluation of tech valuations in a market increasingly wary of overinflated expectations.
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