Amazon’s Logistics Pivot Echoes AWS Playbook as $200 Billion AI Splurge Strains Cash

Amazon launches Supply Chain Services for all businesses, sending shares to a new peak and shaking up the parcel delivery industry.

Amazon is rewriting the rules of its own business model once again. The e-commerce titan has thrown open its sprawling logistics network to external clients, a move that sent shockwaves through the parcel delivery industry and propelled its own stock to a fresh all-time high. The strategy, unveiled on Monday, mirrors the playbook that turned Amazon Web Services into a profit juggernaut: monetize excess capacity.

Shares in the Seattle-based giant closed at €232.70 in European trading, marking a new 52-week peak and a year-to-date advance of more than 20%. The stock now trades roughly 20% above its 50-day moving average, with a market capitalization hovering near $2.9 trillion. Analysts see the logistics push as the catalyst needed to breach the $3 trillion threshold in the coming weeks.

The new service, branded Amazon Supply Chain Services, bundles freight forwarding, warehousing and last-mile delivery into a single offering available to companies of any size—even those that do not sell on Amazon’s marketplace. Early adopters include consumer goods giant Procter & Gamble. The company is effectively leveraging its fleet of more than 80,000 trailers and roughly 100 cargo aircraft, aiming to boost utilization rates and improve returns on the billions already sunk into infrastructure.

The announcement landed like a bombshell on the traditional parcel sector. United Parcel Service saw its shares tumble 10.47% to $96.31 on Monday, while FedEx shed roughly 9%. Amazon’s assault targets the high-margin B2B and healthcare logistics segments that have long been safe havens for incumbents. Having once been their largest customer, Amazon now emerges as a direct competitor with a cost structure honed by massive scale.

The logistics offensive comes on the heels of a blockbuster first quarter. Net sales surged 17% to $181.5 billion, comfortably beating analyst forecasts. Earnings per share hit $2.78, far exceeding the consensus estimate of $1.73. The cloud division, AWS, delivered revenue of $37.6 billion, marking its fastest growth in nearly four years at 28%.

But the aggressive expansion comes at a price. Capital expenditure jumped 77% in the first quarter to $44.2 billion, with the full-year budget set at roughly $200 billion. The bulk of that spending is directed at artificial intelligence infrastructure, including custom AI chips that already generate an annualized revenue run rate of $20 billion. The spending spree squeezed free cash flow to just $1.2 billion in the quarter, while long-term debt swelled to around $119 billion.

Investors, however, appear willing to look past the balance sheet strain. The operating margin held steady at 13.1%, topping market expectations, and the cloud business continues to accelerate. New Street Research lifted its price target to $350, while Jefferies and DZ Bank both see fair value at $320.

Amazon is effectively placing two monumental bets simultaneously: one on transforming logistics into a standalone profit center, the other on dominating the AI era through brute-force infrastructure spending. For now, the market is betting both will pay off.