April 22 - Amazon (AMZN) shares dropped more than 3% on Monday after Wells Fargo flagged a pause in some of the company's international data center leasing activity, according to a note from analyst Eric Luebchow.
The report said Amazon Web Services (AWS) has put a temporary hold on parts of its colocation leasing discussions, particularly overseas. While the exact scale of the slowdown remains unclear, the move mirrors recent signals from Microsoft (MSFT, Financial), which is also reportedly taking a breather after a wave of aggressive lease deals.
Wells Fargo emphasized that Amazon is not walking away from already signed agreements. Rather, it's easing back on preliminary discussions tied to letters of intent or qualification statements.
Luebchow noted that hyperscalers like Google (GOOG, Financial), Meta (META, Financial), and Oracle (ORCL, Financial) continue to be active in the market, while demand from Nvidia (NVDA, Financial) remains "elevated."
Amazon's North American data center capacity exceeds 9 gigawatts, with about 70% of it self-developed. If this is a “digestion phase,” the analyst expects AWS could resume leasing within six to twelve months.
The pause reflects a broader trend of hyperscale operators taking a more measured approach to power-heavy leasing, Luebchow said.
