Amazon.com (NASDAQ: AMZN) ended the trading week on a positive note, closing at $232.69 on Friday, a gain of 2.5% for the session. However, the stock remains 4.8% below its June 18 close, reflecting ongoing investor caution. Friday's trading volume surged to 248.4 million shares, nearly five times the 65-day average of 49.7 million shares, indicating heightened market interest following the release of Prime Day data and news of upcoming AWS price adjustments.
According to Adobe Analytics data cited by Reuters, U.S. online sales during Amazon's Prime Day event, held from June 23 to June 26, reached $26.4 billion, a 9.3% increase year-over-year. However, Numerator, which tracked over 178,000 orders, reported that the average order value fell to $47.66 from $53.34 in the previous year, a decline of 10.6%. This drop in basket size suggests that consumers are focusing on discounted items rather than making larger purchases, a trend that Sonia Lapinsky, managing director at AlixPartners, described as indicative of a "fatigued consumer."
CFRA Research analyst Arun Sundaram noted that tax refunds, which averaged $3,462 in 2026—up 11.1% from the prior year according to IRS data—may have provided a tailwind for discretionary spending. However, this boost is not expected to carry into the fall retail season, adding to concerns about consumer resilience.
On the cloud computing front, Amazon Web Services (AWS) has signaled another price increase for its EC2 Capacity Blocks for machine learning, with rates set to rise by approximately 20% in July, as reported by Business Insider. This follows a 15% hike in January. The AWS pricing page indicates that reservation rates fluctuate based on supply and demand, with the next update scheduled for July 2026. These Capacity Blocks allow customers to reserve accelerated compute resources for machine learning workloads, with terms extending up to 182 days and up to 64 instances per block.
Peter Berezin, chief economist at BCA Research, explained that memory shortages are keeping demand for compute resources above available supply, enabling cloud providers like AWS to pass on higher costs. This pricing power could help offset the soaring infrastructure costs associated with AI expansion.
Amazon's first-quarter results showed AWS revenue of $37.6 billion, up 28% year-over-year, and operating income of $14.2 billion, representing about 59% of Amazon's total operating income. However, trailing-12-month free cash flow has dropped sharply to $1.2 billion from $25.9 billion, largely due to a $59.3 billion year-on-year increase in property and equipment purchases related to AI. CEO Andy Jassy noted in April that AWS is growing at 28%, its fastest rate in 15 quarters, but the key question for investors is whether this growth can sufficiently cover AI spending and prevent another year of near-zero free cash flow.
Looking ahead, Amazon faces a busy period. The second quarter ends on Tuesday, and AWS's new pricing takes effect in July. U.S. markets will be closed on Friday for the July 4th holiday. Analysts suggest that Amazon cannot rely solely on e-commerce gains; it must demonstrate that the AWS AI price hikes are adequate to fund the expanding data center infrastructure required to support AI workloads.
