Amazon's Capex Surge Outpaces Revenue Growth: Analyst Warns of Fair Value Below $250

Amazon's (AMZN) capex and depreciation expenses are growing faster than its revenue, raising concerns among analysts. Despite the company's AWS segment delivering strong growth of around 37% year-over-year, with a backlog now standing at nearly $496 billion, Amazon's capital expenditures and depreciation are outpacing revenue.

The Q2 margin strength was partly due to one-time gains, but structural issues remain regarding AI economics and asset obsolescence. Analyst fizkes believes that fair value for Amazon is below $250, with upside capped until AWS revenue growth and the gap in depreciation expenses narrow meaningfully.