Amazon's Friday Surge Fueled by AI, Pharma, and Streaming Moves

Amazon shares jumped over 5% as strategic announcements addressed investor capex concerns. AWS revealed $15B AI revenue, Pharmacy launched a weight-loss drug, and Prime Video raised prices.

Amazon shares surged more than five percent on Friday, capping a strong week with a trio of strategic announcements that directly address investor concerns over its massive capital expenditure plans. The moves across its cloud, healthcare, and streaming divisions provided tangible evidence of how the company intends to monetize its investments.

The most significant revelation came from CEO Andy Jassy’s annual shareholder letter, which for the first time quantified the revenue from its artificial intelligence services. Amazon Web Services (AWS) now generates an annualized $15 billion from AI offerings. Furthermore, its custom chip business, including Graviton and Trainium processors, has reached an annualized revenue run rate exceeding $20 billion. These figures underpin the division's robust performance; AWS grew 24% year-over-year in Q4 2025 to $35.6 billion in revenue, with operating income hitting $12.5 billion.

Simultaneously, Amazon Pharmacy launched sales of Eli Lilly’s newly approved oral GLP-1 weight-loss drug, Foundayo. This entry into a booming market leverages a key logistical advantage: unlike injectable alternatives, the pill does not require refrigeration. This allows for storage in Amazon’s automated kiosks and simplifies distribution. Insured patients will pay $25 monthly, while the cash price is set at $149, with manufacturer discounts applied automatically at checkout. The company aims to connect 4,500 locations to its same-day delivery network by the end of 2026, creating a closed-loop system for customers who receive a GLP-1 prescription via its One Medical service.

The third pillar of the day's news was a major overhaul of its streaming monetization strategy. In the US, the ad-free subscription tier has been rebranded as Prime Video Ultra, with a price jump to $4.99 per month—a 67% increase. The new tier offers enhanced features, including up to five concurrent streams, 100 downloadable titles, and exclusive access to 4K and UHD content. This move seeks to extract more value from a large and growing viewer base; Prime Video’s ad-supported audience recently surpassed 315 million globally, and its advertising revenue alone contributed nearly $69 billion in 2025. The division's ad revenue had already climbed 23% to $21.3 billion in the last quarter of 2025.

Analysts viewed the announcements positively. Cantor Fitzgerald reaffirmed its buy rating on the stock, citing strong commercial momentum. BNP Paribas analyst Nick Jones argued that investors have been too pessimistic about Amazon's planned $200 billion in capital expenditures for 2026, underestimating the resulting AI revenue potential. He sees a price target of $320 per share, approximately 45% above current levels.

The stock's recent performance had seen a roughly ten percent decline over the prior three months, less than the sector average but reflecting market unease over the impact of heavy spending on free cash flow. Friday’s coordinated news, providing concrete revenue figures and activating new high-margin streams, offered a clearer picture of the intended return on that investment. The stock closed the European trading session at €199.04, with a Relative Strength Index (RSI) of 84.9 indicating a strongly overbought but highly dynamic market situation.