Amazon Borrows $25 Billion to Feed AI Ambitions as Cloud Business Hits a Four-Year Growth Spurt
Published on 07/09/2026 at 18:23 | Redaktion boerse-global.de
Amazon’s cloud computing division is enjoying its strongest stretch in nearly four years, yet the very engine driving that momentum — artificial intelligence — is forcing the company to tap debt markets on a historic scale. AWS revenue surged 28% in the first quarter to $37.6 billion, the highest growth rate in 15 quarters, as the unit’s annualized run rate crossed $150 billion. To help sustain that trajectory, Amazon rolled out a new “Claude Apps Gateway” on Wednesday that lets enterprise customers self-host and control access to AI models built on Anthropic’s Claude technology. The product is designed to capture surging demand from companies that want the power of AI without ceding data sovereignty.
Just a day earlier, the e-commerce and cloud giant priced a $25 billion bond offering spread across eight tranches, with maturities stretching as far as 2066. It ranks as the seventh-largest corporate bond deal globally so far in 2026. Amazon shares slipped 0.98% to €211.45 on the day of pricing, but recovered to close at €213.55 by Wednesday. The proceeds are earmarked for the company’s exploding capital expenditure on AI infrastructure, which has pushed total new debt issuance this year to roughly $92 billion — more than either Alphabet or Meta have raised for their own data-center buildouts.
Despite the impressive size of the deal, demand for Amazon’s debt showed signs of cooling. The offering was 1.6 to 2.5 times oversubscribed, a respectable showing but well below the 3.2 times oversubscription Amazon achieved in March. Amazon had to offer a yield premium of 18 to 21 basis points on the longest-dated tranches to attract buyers. Some market observers see this as early evidence of “funding fatigue” as big technology names crowd the credit markets. Spreads on high-grade U.S. technology bonds have already widened to 0.79 percentage points from 0.74 percentage points.
Should investors sell immediately? Or is it worth buying Amazon?
Wall Street, however, remains squarely behind the stock. Goldman Sachs lifted its price target on Amazon to $335 from $325, maintaining a Buy rating, while TD Cowen reiterated its own positive stance. The consensus among analysts is a Strong Buy, with the average 12-month target well above current levels. Goldman’s Eric Sheridan now expects cumulative cloud-related spending of $827 billion across 2026 through 2028, underpinned by AWS’s swelling order book, which stood at $364 billion at the end of the first quarter.
Insider buying is also reinforcing the bullish narrative. Bill Ackman’s Pershing Square disclosed that it has increased its Amazon stake, arguing that anxiety over AI spending has driven the stock’s valuation down to an attractive entry point. At around 28–29 times forward earnings, the multiple is below its five-year average. Shares currently trade roughly 11% below the 52-week high of €238.05 set on May 5, but 27% above the February low.
For the current quarter, Amazon has guided for revenue of $194 billion to $199 billion and operating income of $20 billion to $24 billion. Early tailwinds are already visible: U.S. Prime Day sales hit $26.4 billion, lending extra support to those targets. The results are due in July, and investors will be watching closely to see whether AWS can sustain its growth rate as the company pours money into meeting AI demand.
Technically, the stock is in a neutral zone. Its relative strength index of 51.4 signals neither overbought nor oversold conditions, while a 30.56% annualized volatility is typical for a mega-cap tech name. The share price sits about 6% above its 200-day moving average of €200.82, confirming that the medium-term uptrend remains intact despite the occasional wobble from the bond market.
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