The Hyperscaler Effect on Retail

Research evidence excerpt

The Hyperscaler Effect on Retail

FICC Research

Credit Research

24 July 2026

Amazon Inc. (AMZN)

We lower our rating on AMZN and the Retail sector to

Underweight. There is ongoing pressure on sector

performance from the credit's outsized representation and Priya Ohri-Gupta, CFA +1 212 412 3759

issuance overhang. Looking to earnings next week, there is priya.ohrigupta@barclays.com

scope for FCF expectations to move lower on higher capex or BCI, US

weaker CFO. Teresa+1 212 526Tian8973

teresa.tian@barclays.com

BCI, US

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• We lower our Retail sector rating to Underweight (from Overweight) to reflect

the ongoing overhang from future issuance at Amazon, which is expected to be a

two to three times annual issuer in the USD market.

• We also lower our rating on Amazon to Underweight (from Market

Weight) because we expect the credit to underperform the sector, particularly as

new issue concessions have continued to move higher as coverage remains lower

than average.

• We estimate that there is room for $25-35bn of further debt to be added to the

balance sheet by YE 26 (which assumes the potential for ~$10bn more issuance

outside the USD market, particularly as the spread cost between USD and EUR for

issuance is now negligible).

• Going into earnings for Amazon next week, we think there is a risk that capex

expectations could be raised or CFO performance could be weaker. On the retail

side, there remains an intense focus on market share, which, coupled with the

Prime Day pull-forward, could weigh on retail margin performance.