Amazon.com Inc. (NASDAQ:AMZN) CEO Andy Jassy on Wednesday said that the company noted the imbalance between supply and demand early and moved to secure supply through long-term partnerships.
Memory And Storage Costs Under Pressure
During Amazon's first-quarter earnings call, Shweta Khajuria of Wolfe Research asked Jassy to elaborate on how the tech giant views the surge in memory and storage prices, as well as broader supply chain inflation.
She also asked what impact these trends could have on the company's capital expenditures this year and potentially next year.
In response, Jassy said that the cost of key components, particularly memory, has "skyrocketed" due to limited supply and strong demand across the tech industry.
"We saw this trend happening early, in the middle to latter part of last year and we have worked with our strategic suppliers to get a significant amount of supply," he said, adding that the company has secured enough capacity to avoid major disruptions.
CapEx Impact And Supply Chain Strategy
While Amazon is not currently facing immediate shortages, Jassy acknowledged that rising component prices could influence capital expenditures going forward.
He said the company is "doing our best to have the supply we need and keep the cost in the right spot," but highlighted that conditions remain fluid.
He also highlighted internal execution, saying, "I think the team has been very scrappy. I think we have done a good job in making sure that we are not capacity constrained there."
Amazon Q1 Earnings Beat Estimates
Amazon reported first-quarter revenue of $181.52 billion, surpassing analyst expectations of $177.30 billion.
The company also posted earnings of $2.78 per share, well above Wall Street estimates of $1.66 per share.
For the second quarter of 2026, Amazon forecast net sales between $194 billion and $199 billion, noting a 10-basis-point foreign exchange headwind.
The company expects operating income to come in between $20 billion and $24 billion.
Price Action: Amazon closed at $263.04, up 1.29% on Wednesday and rose further in overnight trading to $266.60 , gaining an additional 3,56%, according to Benzinga Pro.
According to Benzinga Edge, AMZN ranks in the 93rd percentile for Growth, reflecting strong performance across short, medium and long-term metrics.
Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
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