Amazon.com, Inc. (NASDAQ:AMZN) shares edged higher in premarket trading Monday, adding to a strong Friday rally that saw the stock surge 2.5% on volume nearly five times the 65-day average. The e-commerce and cloud computing giant is navigating a mixed picture of consumer spending at its annual Prime Day event and a strategic price increase for its cloud computing services.
According to data from Adobe Analytics, total U.S. online spending during Prime Day, held June 23-26, exceeded $26.4 billion, a 9.3% increase year-over-year. However, Numerator reported that the average order size dropped to $47.66 from $53.34 in the prior year, a decline of 10.6%. This decline in basket size, despite steady overall demand, shifts the margin test for investors. While more orders can boost gross merchandise volume and seller fees, smaller orders may increase fulfillment costs per dollar spent if consumers focus on essentials and discounts.
CFRA analyst Arun Sundaram noted that tax refunds may have provided a tailwind for the event, while Sonia Lapinsky at AlixPartners characterized the trend as a "fatigued consumer" purchasing only planned items. Discounts remained high, with electronics and apparel each seeing 24% off, up from 23% last year, and toys discounted 20% compared to 19% in 2025.
In a contrasting move, Amazon Web Services (AWS) announced a roughly 20% price increase for EC2 Capacity Blocks for machine learning, effective July, following a 15% hike in January. This pricing power, driven by tight GPU supply, is seen as a positive for AWS margins. BCA Research chief economist Peter Berezin noted that cloud vendors have "greater pricing power" in the current environment.
AWS remains the primary profit driver for Amazon, with first-quarter revenue up 28% to $37.6 billion and operating income of $14.2 billion. However, free cash flow over the trailing twelve months fell to $1.2 billion as the company ramped up capital expenditures by $59.3 billion, primarily in artificial intelligence. CEO Andy Jassy described AWS's growth as the "fastest growth in 15 quarters."
Wall Street remains bullish on the stock, with an average 12-month price target of $319.24, representing a 37.2% upside from Friday's close of $232.69. Analyst ratings include 44 buys, one hold, and zero sells. Recent target updates from Telsey Advisory ($315), Wells Fargo ($312), and JPMorgan ($330) reflect confidence despite the stock trading 15.7% below its 52-week high of $278.56.
Amazon is scheduled to report second-quarter earnings on July 30, which will capture the full impact of Prime Day and provide further insight into consumer behavior, AWS pricing dynamics, and the trajectory of AI-related capital spending. The company also recently announced a $13 billion investment in India by 2030, part of a $48 billion total commitment that includes over $21 billion in AI and cloud infrastructure.
