Amazon Web Services Growth Soothes AI Spending Fears With 37% Revenue Jump

Investors love AI, as long as you're a cloud host

Amazon reported better-than-expected second-quarter earnings on Thursday, and investors loved what they saw. Net sales rose 20%, and cloud revenue stood out as a particular bright spot. This combination of positive results was enough to send Amazon's stock up nearly 10% in after-hours trading. Crucially, Amazon isn't slowing down on data center spending, despite the conventional wisdom that investors want companies to rein it in. One line item, in particular, illustrates Amazon's appetite for investing in infrastructure. Amazon spent $173 billion for the fiscal year ended June 30 on property and equipment -- a category that covers GPUs, natural gas turbines, and plots of land -- up from $107.65 billion from the year before It also raised its 2026 capex forecast from $200 billion to $220 billion -- even as it has begun dipping into its cash reserves to help cover the cost. The company ended the quarter with $7.6 billion less cash than it had 12 months ago, marking its first period of negative free cash flow this year. Under normal circumstances, ballooning expenses would be a tough pill for investors to swallow. But Amazon has a revenue engine that helps justify the spending. AWS revenue rose 37% year over year, clocking $42 billion for the quarter. That's not enough to balance out the capex spending in raw arithmetic, but it shows that demand is growing alongside supply. Given the years-long time lag between breaking ground on a data center and selling its capacity, that's reassuring for investors. Critically, Amazon's AI play isn't limited to building large data centers. The company is also making serious long-term bets on chips like the Trainium TPU and the Arm-based Graviton processor. Those projects don't show up in capex numbers, but they can meaningfully improve margins for the company's cloud business. "We see the AI business following very much the same margin trajectory we saw in the core business before," Jassy said during the company's Q2 earnings call. "AWS and Amazon Bedrock can have a wildly successful business without its own frontier model, and the reason is that there's not going to be a single model to rule them all." This dynamic isn't unique to Amazon. We saw similar patterns at Microsoft and Google, whose shares also popped after reporting strong cloud revenue. By the same token, companies like Meta which have significant capex and no clear revenue source, are still experiencing intense skepticism from investors. Meta's stock fell 8% after earnings this week, as investors focused on its cash flow crunch and continued spending, Of course, investors like revenue and don't like expenses -- that's how markets work. But it's important not to miss the broader lesson about the AI economy. Right now, investors are treating cloud hosts as the most reliable part of the AI stack, while remaining skeptical about the underlying economics for AI labs and AI startups. But Amazon's hosting revenue is someone else's AI bill. In Anthropic's case, it's literally the same money. If that spending isn't sustainable for the big labs and their clients, the revenue won't be stable for Amazon and the other cloud hosts. There's real competition and differentiation at every level of the stack, but if demand for AI doesn't hold up, it's going to be a bad time for everyone. In the end, it all comes back to David Cahn's $3 trillion question. There's either enough demand to justify this buildout or there isn't. Cloud-hosting services like AWS may be a few steps removed from that demand problem, but that doesn't mean they're insulated from it.

Amazon jumps as AWS growth soothes fears over rising AI spending

July 31 (Reuters) - Amazon (AMZN.O), opens new tab shares jumped more than 12% before the bell on Friday after the e-commerce and cloud giant posted its strongest cloud growth in over four years, bolstering investor confidence that its multibillion-dollar AI bets are driving a fresh wave of demand. The rally put Amazon on track to add about $300 billion in market value, as investors looked past a 10% increase in planned capital expenditure to $220 billion and instead focused on booming demand at Amazon Web Services (AWS), the profit engine at the center of the company's AI push. The reaction was in sharp contrast to Alphabet's (GOOGL.O), opens new tab earnings last week, when the Google-parent's shares stumbled ⁠after it reported its first negative cash flow, which stemmed from rising AI-related spending. "The market is becoming increasingly idiosyncratic, rewarding companies that can successfully monetize AI investments while penalizing those with longer-duration paths to generating returns," said Jake Behan, head of capital markets at Direxion. Revenue at Amazon Web Services, the cloud computing unit, jumped 37% to $42.2 billion in the second quarter ended June 30, handily beating analysts' consensus estimate of a 31.21% increase, according to data compiled by LSEG. Amazon CEO Andy Jassy said demand remained so strong that the company's computing capacity proved insufficient to serve customers despite raising ⁠its capital spending. At least five brokerages raised their price targets on the stock following results. "We're encouraged by the strength in the core AWS business, which has a high correlation with AI revenue, and we expect this relationship to further strengthen over time as more AI workloads move into full-scale production and drive additional demand ⁠for core services," J.P. Morgan said in a note. A spending surge from big technology firms, set to exceed $700 billion this year, has raised debt concerns and pressured free cash flow across the board. Amazon's free cash flow ⁠swung sharply negative, with the company burning $7.6 billion on a trailing 12-month basis in the second quarter, versus $18.2 billion in positive free cash flow a year earlier. Peers Microsoft (MSFT.O), opens new tab, Alphabet and Meta (META.O), opens new tab also ⁠reported declines in free cash flow in their latest quarterly reports as they ramp up AI spending. Amazon trades at a price-to-earnings ratio of 24.67, compared with Microsoft's 22.94 and Alphabet's 19.35. Reporting by Kanchana Chakravarty in Bengaluru; Additional reporting by Shashwat Chauhan; Editing by Shinjini Ganguli Our Standards: The Thomson Reuters Trust Principles., opens new tab

Andy Jassy soothed concerns over Amazon's massive AI spending. Here's how he did it

Every weekday, the CNBC Investing Club with Jim Cramer releases the Homestretch -- an actionable afternoon update, just in time for the last hour of trading on Wall Street. Stocks are higher Friday, keeping the S & P 500 on pace to end a volatile week in positive territory. Chipmakers and other AI infrastructure stocks are posting gains for the second straight day after Amazon raised its capital spending outlook and reinforced a healthy AI demand environment (more on that below). But the rally is also being supported by a cleaner technical backdrop, as the leverage that fueled several weeks of forced selling in popular AI stocks has largely been removed from the AI trade, creating a clearing event that may have marked at least a short-term bottom in the theme. On Friday's Morning Meeting, we mentioned a quote from Amazon CEO Andy Jassy on last night's earnings call that made investors feel much more comfortable about the company's aggressive AI infrastructure investments. As promised, we're following up here with the full quote and an explanation of why it matters so much. Here's Jassy: Earlier this year, we said we plan to invest approximately $200 billion in cash capex in 2026, the majority of which to support AI and AWS. At this level of spend and higher, we have clear line-of-sight to strong financial returns. I'll explain why. There are two major parts of the investment: the data centers, and the servers and networking equipment that go into them. These have different capital cycles. Data center capital is spent starting two years before we can put servers into them to start monetizing. Once a data center opens with servers plugged in, we start generating significant revenue right away and then get to monetize these data centers for 30-plus years without having to spend that start-up capital again. Servers and networking equipment operate on a shorter cycle. We typically purchase these a few months before putting them into service, so we have strong visibility into customer demand before we trigger the spend. If the demand isn't there, we won't spend the capital. For servers and networking equipment, on average, it takes a little less than three years to break even on that investment. The servers currently have a useful life of at least five to six years, and most of our AI capacity these days is being contracted for at least five-year terms. That means that we're driving significant free cash flow on the servers and network of equipment in the two to three years after we break even. Those two sentences were the key comments that helped change the perception around Amazon's AI spending. Sure, Amazon's AI buildout requires a massive upfront cash outlay, but the combination of multi-year customer contracts and servers that remain productive well beyond the breakeven point gives management greater confidence in the returns on those investments. It reinforced that today's heavy capital investments are not a permanent drain on cash flow, despite soaring hardware costs. In other words, there is light at the end of the tunnel, and it may be closer than many investors had anticipated. Here's more from Jassy: It's also worth noting that AWS has a strong track record of pulling forward breakevens on server equipment, where we've already made meaningful progress and finding ways to extend the useful life of this equipment without sacrificing customer experience. So for our data centers, which have 30-plus-year useful lives, we should get at least five to six generations of server economics, like I explained earlier, with subsequent generations after the first having even better overall economics because we don't have to repeat that upfront data center investment I mentioned earlier. This means in the short-term, when demand is necessitating so many data centers being built simultaneously in advance of when we can start monetizing them, we'll spend a lot of capex and encounter free cash flow headwinds until these data centers come online, can be monetized and we get a few years into these servers being utilized. Then, as we get a few years out and the revenue growth outpaces the incremental capex growth, which will happen at some point, the resulting revenue, free cash flow and return on invested capital is very compelling. We've done this before in the first era of cloud computing just over a longer time horizon, where demand built more gradually than it has in AI. Investors entered this week demanding more clarity on the economics behind the hyperscalers' massive AI investments. If companies were going to raise capital spending expectations, they needed to explain not only what they were investing in, but also the expected payback period and why they had confidence those investments would generate attractive returns. We still believe the hyperscalers should avoid damaging their balance sheets by taking on excessive debt, burning through cash, or, as a last resort, issuing equity to fund these investments. For now, however, Jassy's explanation helped ease those concerns by providing investors with a clearer line of sight into the cash-flow profile and returns Amazon expects from these AI infrastructure investments. Next week is still a busy one of earnings with about a quarter of the S & P 500 scheduled to report. Within the portfolio, we'll hear from Qnity Electronics and DuPont before the opening bell on Tuesday, Eli Lilly before the opening bell on Wednesday, and Honeywell Aerospace after the closing bell on Wednesday. It's also an important one for economic data. Starting Monday, the economic calendar picks up with the Institute for Supply Management's (ISM) monthly look at manufacturing activity. Tuesday brings factory orders, durable goods orders, and the so-called JOLTS report, which captures job openings and the number of workers who left their roles. Wednesday features ADP's private payrolls and ISM's monthly services index, followed by outplacement firm Challenger's job cuts data on Thursday. The week wraps up Friday with the closely watched July nonfarm payrolls report. The economy is expected to have added 65,000 jobs in July, according to economists polled by FactSet. (See here for a full list of the stocks in Jim Cramer's Charitable Trust.) As a subscriber to the CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade. Jim waits 45 minutes after sending a trade alert before buying or selling a stock in his charitable trust's portfolio. If Jim has talked about a stock on CNBC TV, he waits 72 hours after issuing the trade alert before executing the trade. THE ABOVE INVESTING CLUB INFORMATION IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY , TOGETHER WITH OUR DISCLAIMER . NO FIDUCIARY OBLIGATION OR DUTY EXISTS, OR IS CREATED, BY VIRTUE OF YOUR RECEIPT OF ANY INFORMATION PROVIDED IN CONNECTION WITH THE INVESTING CLUB. NO SPECIFIC OUTCOME OR PROFIT IS GUARANTEED.

AWS is 'booming,' but Amazon's free cash flow turns negative on record AI spending

Amazon Web Services revenue grew 37% last quarter, its fastest pace since the end of 2021, but the company is spending so much on data centers and infrastructure to fuel that growth that its free cash flow for the past 12 months turned negative for the first time since 2023. Overall, the tech giant reported $200.6 billion in revenue for the second quarter, up 20%, with operating income of $27.5 billion, up 43%. That beat Wall Street's expectations of about $196.4 billion in revenue, and topped the high end of Amazon's own guidance. Profits were $62.6 billion, or $5.75 per share. However, that included $53.4 billion in pre-tax gains, primarily on Amazon's investment in Anthropic, which significantly inflated the bottom line. Excluding those gains, EPS would have been about $1.95, above analyst expectations of $1.82. Amazon shares rose more than 8% in after-hours trading following the report. AWS revenue reached $42.2 billion in the quarter, a $169 billion annualized run rate. Operating income in the cloud division rose 64% to $16.6 billion, lifting AWS operating margin to 39.4% from 32.9% a year ago -- evidence that the AI buildout is starting to convert into profit, not just revenue. "AWS is booming," CEO Andy Jassy said in the release, adding that the company's AI and chips businesses "each eclipsed run rates of more than $25 billion." The chips business, which Jeff Bezos called the next pillar of the company this week, was at a $20 billion run rate three months ago. Amazon's operations generated $161.4 billion over the past 12 months, but the company spent a net $169 billion on property and equipment -- up $66.1 billion from a year earlier, an increase Amazon attributed primarily to AI investments -- leaving a shortfall of $7.6 billion in free cash flow. A year earlier, it had $18.2 billion left over for the prior 12 months, by comparison. Free cash flow is what's left after a company covers its operating costs and pays for things like data centers and warehouses. It's an important measure of financial health, which investors watch closely because it shows how much cash a business actually creates after paying for its own growth.

Amazon beats estimates for quarterly cloud revenue growth

July 30 (Reuters) - Amazon.com (AMZN.O), opens new tab topped market expectations for quarterly cloud revenue growth on Thursday on the back of surging enterprise AI spending, signaling the company's hefty investments were bearing fruit. Revenue at its cloud computing unit, Amazon Web Services, jumped 37% to $42.2 billion in the second quarter ended June 30, compared with analysts' consensus estimate of a 31.21% increase, according to data compiled by LSEG. Shares of the Seattle, Washington-based company were up about 6% in extended trading, having risen about 4% during the session. Amazon said it burned $7.6 billion of cash on a trailing twelve months basis in the second quarter, compared to $18.2 ⁠billion in free cash flow a year earlier. The strong showing from the world's No. 1 cloud services provider mirrors solid performances from smaller rivals Microsoft (MSFT.O), opens new tab and Alphabet's (GOOGL.O), opens new tab Google, both of which comfortably beat Wall Street estimates for cloud revenue. The upbeat results could help quell some concerns over Big Tech's relentless AI investments -- set to exceed $700 billion this year -- which have strained cash flows at the traditionally cash-rich companies and sparked worries that they might be overbuilding capacity. Companies, however, have argued that the outlays are crucial to help ease capacity constraints that have prevented them from fully meeting AI-driven demand, pointing to their ⁠ballooning contract backlogs. Amazon Web Services has benefited from a growing roster of partnerships this year, including massive cloud infrastructure and chip supply deals with OpenAI, Anthropic, Meta (META.O), opens new tab, Pinterest (PINS.N), opens new tab and Snowflake (SNOW.N), opens new tab. The company said earlier this year that AWS' annual AI revenue run rate has surpassed $15 billion and was growing in a triple-digit percentage range, ⁠looking to reassure investors that its investments were generating clear returns. Analysts have said Amazon will be able to sustain that level of growth as more data center capacity comes online over the next several months. In its ⁠e-commerce business, Amazon has been rolling out faster delivery services globally and expanding to more rural areas of the U.S. to draw more shoppers. The company also held its annual Prime Day event ⁠in the quarter, running from June 23 through June 26. The online shopping event featuring steep discounts saw customers snap up electronics, appliances and everyday essentials, with an Adobe Analytics estimate pegging total spending at over $26.4 billion. Reporting by Deborah Sophia in Bengaluru; Editing by Sriraj Kalluvila Our Standards: The Thomson Reuters Trust Principles., opens new tab

AWS' outperformance gives Wall Street analysts confidence in Amazon's AI strategy

Wall Street - just like investors - loved Amazon's earnings report, particularly its growth at cloud business Amazon Web Services. Shares of Amazon jumped 11% after the company reported a revenue beat in its second-quarter report . The hyperscaler also saw its cloud business grow 37% year over year, above estimates for 31%. AWS and Amazon's advertising business' revenues also both exceeded expectations. CEO Andy Jassy said in a press release that AWS growth is "booming," and that the growth in the company's cloud business was the fastest since 2021. AWS' backlog reached $496 billion in the quarter. Analysts across Wall Street hiked price targets, and mostly maintained their buy ratings on the stock. "The market is rewarding evidence," said Canaccord Genuity's Maria Ripps in a note, "with AWS re-accelerating as margins expand, demand visibly outrunning capacity into 2027, and enterprise inference adoption still early." AMZN YTD mountain Amazon year-to-date. Analyst Mark Shmulik at Bernstein said AWS has finally hit a growthinflection and now views the company at the top of the artificial intelligence cloud wars. Revenue guidance for the current quarter at Amazon came in slightly weaker-than-expected, at between $197 billion and $202 billion. Analysts polled by LSEG were expecting a forecast of $204.1 billion for the third quarter, and the company blamed the miss for the decision to move Amazon's "Prime Day" event to June instead of July. Amazon's capital expenditures in the quarter came in above estimates, according to StreetAccount, at $54.21 billion, up 68% year over year. Capital expenditures for 2026 are now projected to hit $220 billion, the company said. While other big technology companies have been victims of investors' worries over fears capex is too high with little evidence of a return on investment, analysts on the Street said Amazon eased those fears through its commentary. "Management provided a much-needed framework on data center returns, with buildings having a 30yr life, server & networking assets having payback periods of less than 3yrs, and then strong returns over the remaining 3yr useful lives," Bank of America analyst Justin Post wrote in a Friday note. Baird: Outperform, $300 "We reiterate our positive view with Q2 results demonstrating the strong acceleration in AWS as more capacity and new contracts contribute, while the e-commerce segment benefited from clear market share gains (e.g., 17% paid unit growth) and margins continuing to scale even excluding one-time benefits (tax refunds/energy derivative gain.)." UBS: Buy, $318 The bank's price target, up from $305, indicates a 35% gain from Thursday's close. "The updated disclosure of $25B in AI ARR for AWS alongside $496B in backlog - both suggest that demand from enterprises for Bedrock and core are both accelerating. We had anticipated the backlog to step up by $100B given the previously-announced Anthropic agreement, but it grew by an incremental $51B QOQ. This sets the stage for what should be ~39% YOY growth for AWS into 2H26 and what should be above 40% growth next year as OpenAI starts to use Trainium chips in early-2027." Bank of America: Buy, $320 The bank's price target, up from $310, represents a nearly 36% rise from Thursday's close. "Amazon's AI positioning has improved significantly in the past 12 months, with AI revenues growing to 15% of total Cloud revs., benefiting from rapid capacity additions, Trainium improvements, and accelerating Bedrock demand. While higher '26 capex will pressure FCF (we est -$40bn in 2026), we believe Amazon is building an asset base that will have high returns, and that Amazon is well positioned to further benefit from the upcoming inference wave driven by agentic AI." Bernstein: Outperform, $320 The bank's price target is up from $315. "Management offered the cleanest commentary around returns against this capex which went up to $220B for 2026 with expectations of elevated spending into 2028. The current spending mix has a major portion allocated to Data Center build outs, and when built, the spend further shifts to servers with short pay-back periods." Oppenheimer: Outperform, $320 "AWS margins were well ahead of expectations, +40bps q/q, ex. Derivative gain, challenging the bear case that AI revenue is lower margin, and reaching 15% of business. The $4.7B of sequential AWS growth dollars was the largest in history, in line with GCP and more than Azure." Canaccord Genuity: Buy, $330 "Management also raised its FY26 CapEx outlook to approximately $220B (from ~$200B), a risk that has pressured other prints this earnings season, although the accompanying capital framework, in which server and networking spend is triggered only against visible demand, break-even arrives in under three years, and most AI capacity is contracted on at least five-year terms, provided a concrete basis for underwriting the higher spend." RBC Capital Markets: Outperform, $330 The bank's price target, up from $320, implies a 40% gain from Thursday's close. "AMZN's Q2 print was exactly what bulls wanted... Stepping back, AMZN was our favorite internet mega-cap idea starting out the year on AI infrastructure's value capture looking more certain than models or intelligence while it had not yet shown a real inflection. The inflection may finally be arriving." Morgan Stanley: Overweight, $335 "AWS's $496bn backlog (up $132bn q/q) was 5%, or ~$20bn better than expected. This, in our view, continues to be an important indicator of durable multi-year growth to come at AWS." Truist: Buy, $350 The bank's price target, up from $320, represents a 48% gain from Thursday's close. "Mgmt continues to earn the right to invest despite the negative NT FCF impact as these investments are becoming increasingly de-risked. AMZN is one of the best plays on the secular growth of AI/Cloud, eCom, and Ads, all at a compelling valuation." Citi: Buy, $350 The bank's price target is up from $325. "The challenge continues to be compute capacity, with management reaffirming its commitment to double capacity by '27 and we once again raise our CapEx projections. Perhaps the biggest surprise this quarter -- and there were many -- was AWS' margins expanding 520bps to 38.1% (ex-its energy contract benefit) on what we believe are structural benefits." Barclays: Overweight, $365 The bank's price target, up from $330, indicates a nearly 55% rise from Thursday's close. "AWS is benefiting from scale, custom silicon, and software optimizations across the stack. We think these are durable advantages, and demand is clearly off the charts based on the $496B backlog (up $252B since beginning of 2026). At the same time, retail is offering a wider range of SKUs at lower prices and with faster delivery speeds, and hence is gaining share on its peers." JPMorgan: Overweight, $365 The bank's price target is up from $330. "Importantly, management emphasized that the ROIC on its AI investments is compelling and it has a clear line-of-sight to strong financial returns. In terms of the ROIC framework, it takes less than three years to breakeven on server and networking equipment investments, which have a useful life of at least 5-6 years, while data centers have 30+ year useful lives, enabling five to six generations of servers over time. We project AWS growth of +38% in 2026 and +33% in 2027, which could be conservative based on backlog." Goldman Sachs: Buy, $375 The bank's price target, up from $335, represents a 59% gain from Thursday's close. "Over the next 12+ months, we reiterate our view that Amazon can produce a strong mix of compounded revenue growth and operating margin expansion on a multi-year horizon while continuing to make critical investments in long-term growth initiatives. We see AMZN as well positioned for future outperformance."

Amazon earnings preview: Wall Street looks for more cloud growth as AI spending hits a record

Amazon reports quarterly earnings Thursday afternoon, facing the same test as every other big tech company right now: whether it's generating enough business to justify its massive AI spending. Wall Street expects revenue of about $196.4 billion, up 17% from a year ago, and earnings of $1.82 per share. That's essentially the midpoint of Amazon's own forecast for the second quarter. Part of that growth is due to the calendar. Prime Day ran June 23-26 this year, during the second quarter in the U.S. and most large markets. Last year it ran July 8-11, in the third quarter. That gives Amazon's retail numbers a boost this time that the year-ago quarter didn't have. Another factor is the cloud. AWS grew revenue 28% last quarter, its fastest rate in nearly four years, and analysts expect the acceleration to continue with revenue of roughly $40.5 billion for the second quarter, up 31%, according to Zacks Consensus Estimates. The company plans a record $200 billion in capital expenditures this year, nearly all of it for data centers, servers and chips to support increased capacity for training and running AI models. Amazon is making those investments based in part on demand from big AI companies including OpenAI and Anthropic, which have signed commitments to AWS worth $138 billion and more than $100 billion, respectively, for the coming years. "We're not investing approximately $200 billion in capex in 2026 on a hunch," CEO Andy Jassy wrote in his April shareholder letter. In the meantime, the spending is absorbing nearly all of the cash from Amazon's operations. Free cash flow fell to $1.2 billion over the past 12 months, from $25.9 billion a year earlier. Investors seem to be losing patience with that tradeoff overall. Google parent Alphabet beat expectations last week and its stock fell anyway, after raising its own capital spending forecast to as much as $205 billion for the year. Microsoft reports earnings Wednesday afternoon. One difference for Amazon is its custom chip business -- Graviton, Trainium and Nitro -- which passed a $20 billion annual revenue run rate last quarter. Jeff Bezos said this week that it's becoming a fourth pillar of the company, alongside Marketplace, Prime and AWS. The company is overhauling its approach to AI model development. Business Insider reported this week that Amazon is winding down most of its in-house Nova models and concentrating engineers on a new frontier model effort, with a new flagship model expected at re:Invent this fall. Amazon cut jobs in its AGI organization last week and confirmed that it's closing its San Francisco AI site, while saying its frontier model research would continue. At the same time, AWS is spending to help other companies deploy AI, committing $1 billion at the end of June to embed its own engineers with enterprise customers building agentic systems, following similar moves by OpenAI and Anthropic. Check back with GeekWire for coverage on Thursday afternoon.

Amazon revenue soars as AI investments pay off

Why it matters: The surging AI economy -- centered around cloud companies like Amazon, hyperscalers and data center investments -- is booming, even as questions are mounting about whether it's sustainable. Driving the news: Amazon delivered a 20% increase in net sales to $200.6 billion, easily topping S&P Capital IQ expectations of $196.4 billion. * Much of the gain came from a triple-digit growth in Amazon Web Services' AI business and triple-digit growth in its chips business -- both of which now represent an annualized revenue rate of $25 billion. Zoom in: Amazon's North America sales rose 16%, international sales increased 15%, and AWS sales jumped 37%. * The company recorded net income of $62.6 billion, with $53.4 billion of that attributable to pre-tax gains stemming from the company's investment in Claude maker Anthropic. * "The strong showing from the world's No. ⁠1 cloud services provider mirrors solid performances from smaller rivals Microsoft and Alphabet's Google, both of which comfortably beat Wall Street estimates for cloud ⁠revenue," Reuters noted. Yes, but: Amazon's free cash flow in the 12-month period ended June 30 amounted to an outflow of $7.6 billion, down from an inflow of $18.2 billion in the comparable period a year earlier.

Amazon Q2 2026 earnings: AWS grows 37%, revenue tops $200B

Amazon $AMZN's cloud division grew 37% year over year, its fastest rate in 18 quarters, and total revenue crossed $200 billion for the first time in a single quarter, the company announced Thursday. Total net sales for the second quarter of 2026 reached $200.6 billion, up 20% from $167.7 billion a year earlier. Amazon Web Services revenue came in at $42.2 billion, giving the division an annualized revenue run rate of $169 billion. Operating income rose 43% to $27.5 billion, compared with $19.2 billion in the same period last year. "AWS is booming, growing 36.7% year-over-year in Q2 ... and our AI and Chips businesses each eclipsed run rates of more than $25 billion," Amazon President and CEO Andy Jassy said in a statement. AWS operating income reached $16.6 billion in the quarter, up from $10.2 billion a year earlier, at an operating margin of 39.4%. Net income for the quarter reached $62.6 billion, or $5.75 per diluted share, compared with $18.2 billion, or $1.68 per diluted share, in the second quarter of 2025. The company said Q2 net income included non-operating pre-tax income of $53.4 billion, primarily from its investments in Anthropic. The Q2 revenue figure topped analyst expectations of $196.47 billion, and the AWS figure exceeded expectations of $40.54 billion, according to CNBC. Analysts had projected 31% growth for AWS, a figure the division handily beat. Amazon's advertising services revenue grew 26% year over year to $19.8 billion. North America segment sales rose 16% to $116.2 billion, while international segment sales increased 15% to $42.2 billion. Capital spending continued to climb, with property and equipment purchases on a trailing 12-month basis reaching $169 billion, up 64% year over year, driven by investments in AI infrastructure. Free cash flow on a trailing 12-month basis swung to an outflow of $7.6 billion from an inflow of $18.2 billion in the prior year period. For the third quarter, Amazon guided for net sales of $197 billion to $202 billion, representing growth of 9% to 12%, and operating income of $22.5 billion to $26.5 billion. Shares climbed over 9% in after-hours trading following the release.

Andy Jassy said Amazon will spend $220 billion this year -- and still won't have enough capacity to meet demand | Fortune

Amazon's stock price jumped more than 9% in after-hours trading on Thursday after the retail-and-AI giant reported second-quarter results buoyed by its Amazon Web Services cloud business, which is racing faster ahead than it has in more than four years. The cloud unit posted $42.2 billion in revenue in Q2, up 37% from $30.9 billion a year ago, marking AWS' fastest growth in 18 quarters, and what Amazon CEO Andy Jassy called its fifth consecutive quarter of accelerating growth. AWS added more than $4.6 billion in revenue quarter over quarter, and AWS operating income hit $16.6 billion, up 64% from $10.2 billion a year ago, on a 39.4% margin, up from 32.9% in the same period a year ago. AWS's backlog -- customer agreements representing future revenue -- grew to $496 billion. "AWS is now a $169 billion dollar annualized revenue run rate business, which, for perspective, would place it 24th on the Fortune 500 list if it was a standalone company," Jassy said during Thursday's earnings call. Across all of Amazon businesses including stores, advertising, Prime, devices, and cloud, net sales rose 20% to $200.6 billion, compared with $167.7 billion a year earlier. Operating income surged to $27.5 billion, from $19.2 billion. Net income hit $62.6 billion, or $5.75 per diluted share, compared with $18.2 billion, or $1.68 per share, a year ago -- with a caveat that the net-income figure includes $53.4 billion in non-operating income primarily from Amazon's investments in Anthropic. Advertising, one of the unsung heroes of Amazon's business, grew 26% year-over-year, up from 22% growth a year ago when the segment hit $15.7 billion. Meanwhile, free cash flow, a metric that has caused some angst among investors as hyperscalers and cloud providers have committed to plowing more than $800 billion into building out data centers and AI infrastructure, flipped to negative $7.6 billion, compared with an inflow of $18.2 billion a year ago. The flip is driven by Amazon's $66.1 billion year-over-year increase in equipment purchases, which Amazon said reflects AI investments. During the call, Jassy told investors that Amazon now expects to spend $220 billion in capital expenditures in 2026, up from its prior estimate of $200 billion, due to higher memory costs. Even at the elevated level, however, Jassy said Amazon still won't "have enough capacity to meet all the demand we have in 2026. And I believe this dynamic will also be true in 2027 too." Undergirding much of the growth is AWS, which "is booming," said Jassy in his remarks. The acceleration of AWS has been a steady build that began its most recent ascent in the third quarter of 2025 when growth hit 20% and accelerated each quarter until 37% in Q2. During the same span, AWS' operating margins expanded from 32.9% a year ago to 39.4% while the company has been spending heavily on data center infrastructure. AWS property and equipment grew to $223 billion in Q1 up from $190 billion the quarter before. (Comparable Q2 figures haven't been published yet.) On Thursday's call, Jassy said the growth acceleration is being driven by capacity additions plus other factors. Customers are gravitating toward AWS because it has "the broadest functionality across both cloud core and AI" and "the strongest operational performance and security." "As more and more companies are bringing their inference workloads to production, they want it to live near the rest of their workloads and data, and so much more of it lives in AWS than anywhere else," said Jassy. And as for Amazon's core cloud business, which has seen its own boost from post-training reinforcement learning and agent tool use, Jassy noted that 85% of global IT spending is still on-premises. Meaning, plenty of companies are still running their own hardware in their own facilities. "That equation is going to flip in the next 10 to 20 years," he said, adding that AWS is "winning the lion's share" of enterprise cloud migration plans. Customer adoption of Bedrock -- Amazon's platform for accessing AI models from Anthropic, Meta, and OpenAI -- has seen solid performance and customers spent more on the service in Q2 than in all prior quarters combined, an analyst noted on Thursday. Jassy's view is that AWS and Amazon can "have a wildly successful business" without its own frontier model because there won't be one model "to rule the world." "It's not just Anthropic; it's not just OpenAI," Jassy said. "You see increasingly more and more companies being interested in the open models as well, and we have all of them in Bedrock." Meanwhile, AWS remains on pace to double its power capacity by the end of 2027, compared with 2025, Jassy said.

Amazon soars after CEO Andy Jassy makes the case for its massive AI investment

Amazon shares rallied after the company reported a much stronger-than-expected second quarter, with its high-margin cloud computing business delivering its fastest growth in 18 quarters. CEO Andy Jassy also delivered exactly what investors like us wanted to hear: a clear explanation of how its massive investment in artificial intelligence will generate returns. Revenue increased 20% year over year to $200 billion, beating the consensus analyst estimate of $196.47 billion, according to LSEG data. Earnings per share based on generally accepted accounting principles (GAAP) increased 242% year over year to $5.75. However, we cannot compare it to the $1.82 LSEG consensus estimate because the results included pre-tax gains of $53.4 billion in non-operating income primarily related to the company's investment in Anthropic. The inability to compare earnings is why we are placing greater emphasis on operating income, which knocked it out of the park, increasing 43% year over year to $27.46 billion, beating the $23.57 billion consensus forecast. Operating income benefited from roughly $1.2 billion in lower expenses, driven by $600 million in tariff-related refunds and a favorable change in the fair value of energy contracts. AMZN 1Y mountain Amazon 1-year stock performance Bottom line Amazon jumped about 10% to $258 in after-hours trading, putting shares at their highest level since early June. In May and June, the market began to worry about the seemingly unlimited AI infrastructure spending by the hyperscalers. The uncertainty over the returns companies like Amazon would earn on the hundreds of billions of dollars invested in artificial intelligence caused shares to drop from their high of about $275 in early May to $232 entering this week. That's what makes this earnings print -- and the market's reaction -- so interesting. Ignore the outlook for a moment because Amazon's massive size makes it difficult for the company to guide on a quarter-to-quarter basis. That's why management usually errs on the conservative side, and the market can see that tonight. Amazon's second-quarter revenue and operating income were above the high end of the range provided three months ago. What investors really wanted to know about was capital expenditures (capex), and they didn't flinch when management raised its forecast this year by $20 billion to $220 billion. The increase was largely driven by higher memory costs. Unlike Alphabet and Meta , whose shares fell after they raised capital spending guidance, Amazon's stock didn't skip a beat. Why we own it Amazon is widely known for online shopping, but its cloud business is the real breadwinner. Advertising is another fast-growing business with high margins. Investment in robust e-commerce logistics infrastructure makes its online storefront the place to be. Prime leverages free shipping and video streaming, along with tons of other perks, to keep users paying every month. Competitors : Walmart , Target , Microsoft , and Alphabet Most recent buy : April 15, 2025 Initiated : February 2018 Were investors bracing for a larger capex increase? Are they now more comfortable with Amazon's AI spending after Amazon Web Services delivered 37% year-over-year revenue growth on a high revenue base while maintaining strong margins? Or did CEO Andy Jassy's explanation of the economics behind Amazon's AI investments resonate? On the conference call, he laid out the company's line of sight to earning attractive returns on its data center investments and explained how cash flow should improve as new data centers come online and server capacity is utilized. "As we get a few years out and the revenue growth outpaces the incremental capex growth, which will happen at some point," Jassy said, "the resulting revenue, free cash flow and return on invested capital is very compelling." The answer may be a combination of all three. Not all hyperscalers are created equal. There are clearer paths to monetizing investment at Amazon than at Meta, and that's why Amazon is being rewarded. AWS is thriving, and it's hard to argue Amazon shouldn't be investing aggressively to meet demand given the business is delivering rapid revenue growth at highly attractive margins. We reiterate our 1 rating and $300 price target. Commentary Revenue growth at cloud unit Amazon Web Services (AWS) accelerated once again, this time to 36.8% from 28.4% last quarter, leading to revenue of $42.23 billion. This was much better than what analysts had expected. The consensus forecast was for revenue growth of about 31% and revenue of $40.54 billion. AI is clearly having a positive impact on AWS's growth. You don't grow at the fastest rate in 18 quarters without a significant tailwind. The run rate for AWS's AI business is now up to more than $25 billion, up a triple-digit percentage year over year. Operating income and operating margin also beat expectations. The fast sales growth led to strong operating leverage, with margins bumping up toward 40% from 33% one year ago. The company's portfolio of in-house chips, such as Graviton, Tranium, and Nitro, now exceeds a $25 billion run rate, up from $20 billion last quarter. On the call, Jassy said it's a "real chance" that Amazon will start selling its chip directly to customers, similar to Alphabet's relationship with Anthropic for its tensor processing units (TPUs). The AWS backlog closed the quarter at $496 billion, up from $364 billion last quarter. One reason for the quarter-over-quarter jump was the $100 billion collaboration it announced with Anthropic in April. With a backlog this large, expect Amazon to continue to aggressively invest. As for the rest of the company's business segments, there were solid revenue beats across Online Stores , Third-Party Seller Services , Advertising , and Other ( which includes healthcare, licensing, co-branded credit cards, and other businesses). We like to see the beats in Advertising because it's a high-margin revenue stream. Subscription Services is another high-margin business , but it missed by $88 million . Physical Stores also was a miss. Amazon's strength was broad-based. North America sales increased 16% to $116 billion, beating the consensus estimate by about $2.2 billion. Operating margins expanded 34 basis points over last year. In the International segment, revenue increased 15% year over year, but that missed by about $500 million. However, operating margins expanded by 1 basis point, leading to higher operating income than anticipated. On the Capital Expenditures side, Amazon spent approximately $53.1 billion in the quarter, up from about $44 billion in the first quarter and above the consensus estimate of $49 billion. Guidance Amazon provided guidance for the third quarter that was slightly below the street. As mentioned above, these figures are usually conservative. Both revenue and operating income in the reported quarter were above the high end of the range provided three months ago. The company expects net sales to increase 9% to 12% year over year, to $197 billion to $202 billion. That midpoint of $199.5 billion is below the consensus estimate of $203.9 billion, according to FactSet. Second-quarter operating income is expected to be between $22.5 billion and $26.5 billion. This midpoint of $24.5 billion was slightly below the consensus estimate of $24.98 billion. (Jim Cramer's Charitable Trust is long AMZN. See here for a full list of the stocks.) As a subscriber to the CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade. Jim waits 45 minutes after sending a trade alert before buying or selling a stock in his charitable trust's portfolio. If Jim has talked about a stock on CNBC TV, he waits 72 hours after issuing the trade alert before executing the trade. THE ABOVE INVESTING CLUB INFORMATION IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY , TOGETHER WITH OUR DISCLAIMER . NO FIDUCIARY OBLIGATION OR DUTY EXISTS, OR IS CREATED, BY VIRTUE OF YOUR RECEIPT OF ANY INFORMATION PROVIDED IN CONNECTION WITH THE INVESTING CLUB. NO SPECIFIC OUTCOME OR PROFIT IS GUARANTEED.

Amazon beats expectations with cloud and AI growth

San Francisco (United States) (AFP) - Amazon beat analysts' expectations on Thursday when it reported growth in overall revenue and sales, particularly in its cloud, artificial intelligence and chips divisions. Its revenue increased 20 percent to more than $200 billion in the second quarter, compared to last year, with its cloud business, Amazon Web Services, jumping 37 percent to reach $42.2 billion. The company meanwhile said that two of its AI-related divisions grew by "triple-digit percentages" -- its AI cloud and chips businesses each "exceeded" $25 billion annual revenue run rates, a measure of recurring sales. Amazon stock jumped by more than 7 percent after hours. The company is working to show that its heavy investments in artificial intelligence, alongside the rest of the tech sector, are paying off. AWS is "booming," Amazon CEO Andy Jassy said during a call with analysts Thursday afternoon. He added that the company believes AWS alone could "very possibly be a trillion-dollar annual revenue business for us in time." The company has developed its own AI models, known as Nova, though a recent report from Business Insider said the company is winding down that work. "AWS and Amazon can have a wildly successful business without its own frontier model," Jassy said on Thursday, but he denied it was abandoning the effort. "We are pursuing our own frontier model." It also offers customers access to dozens of other models from developers, including those from OpenAI, which makes ChatGPT, and Anthropic, which makes Claude. Some AWS customers are even using the service "to build their own foundation models," which are "smaller models that leverage their proprietary data," rather than using bigger AI models from other competitors, Jassy said. Amazon has made investments and signed partnerships worth billions with both OpenAI and Anthropic. -Spending billions - Amazon, Microsoft, Alphabet and Meta are collectively on track to pour around $700 billion into AI data centers, chips and computing infrastructure this year. On Thursday, Amazon increased its estimate for capital expenditures in 2026. It now expects to spend $220 billion this year, up from its previous estimate of $200 billion, Jassy said. On Wednesday, Microsoft adjusted its forecast for total spending in the 2026 calendar year to $175 billion, down from $190 billion previously. The maker of LinkedIn and Xbox likewise showed growth in revenue and profits, and said that its AI-powered business productivity tool, called Copilot, grew to over 30 million paid users. Microsoft shares soared over 15 percent on Thursday after reporting results on Wednesday that beat expectations. Meta meanwhile raised its spending estimate to as much as $145 billion this year, nearly double what it spent in 2025, when it reported its results on Wednesday. The maker of Facebook, Instagram and WhatsApp reaffirmed that it would keep spending heavily on the data centers and chips underpinning its AI effort. Meta's shares dropped as much as 12 percent during after-hours trading on Wednesday after it reported disappointing results, and closed down another 8 percent on Thursday. Last week, Alphabet increased its capital expenditure estimate for the full year to as much as $205 billion, a jump from its previous estimate of $190 billion that CFO Anat Ashkenazi said was driven by AI investments.

Growth accelerates at AWS, but so does CapEx spend on AI - with lots more to come, warns CEO Andy Jassy

Revenue at Amazon Web Services jumped 37% to $42.2 billion in the second quarter ended June 30, the fastest growth rate since 2021. But CapEx spend on building out infrastructure to meet AI-driven demand is set to rise to $220 billion for this year. Total sales for Amazon as a whole rose 20% year-on-year to $200.6 billion, compared with $167.7 billion. Net income increased to $62.6 billion from $18.2 billion. AWS operating income was $16.6 billion, compared with $10.2 billion in second quarter 2025. AWS is "booming", according to Amazon CEO Andy Jassy: AWS is now $169 billion annualized revenue run rate business, which for perspective, would place it 24th in the Fortune 500 list if it was a stand-alone company. Our chips business now has an annual revenue run rate of over $25 billion, growing triple-digit percentages year-over-year. Our AI revenue run rate climbed significantly quarter-over-quarter and is now also over $25 billion, growing triple-digit percentages year-over-year. Customers choose AWS because we offer the broadest capabilities, they want their AI inference to reside near their other applications and data and more of it resides in AWS than anywhere else and because AWS has the strongest security and operational performance. Growth is coming from both AI and non-AI users, the latter referred to as core, he adds: Growth in AI drives core because post-training reinforcement learning and agent tool use is mostly done on CPUs versus AI accelerators. This is an advantage for AWS as our Graviton chip is the strongest CPU chip offering up to 30% to 40% better price performance than other options. You need a place to store this AI data and to run vector databases which are also emblematic of a meaningful edge for AWS because we have the broadest and most capable functionality by a fair bit in these core infrastructure areas. New AWS agreements during the quarter included Warner Bros. Discovery, Vodafone, Siemens Energy, Ryanair, Pinterest, Snowflake, Moody's, Danske Bank, WNBA, Pennymac, Fiserv, WPP Enterprise Solutions, Vonage, Recursive, fal, Chai Discovery, Odyssey, TwelveLabs, Reactor, OpenRouter, Dash0, New York State Office of Information Technology Services, State of Iowa, University of South Florida, and The University of Utah. Model behavior In common with an emerging theme among the hyperscalers, Jassy also posited that a multi-model approach is increasingly favored by customers, rather than strict adherence to one of the big frontier model providers: As we've been saying for 18 months now, technically competent companies are going to build their own foundation models, not the really big frontier models, but smaller models that leverage their proprietary data. There is no easier service for this than our SageMaker AI service. Customers also need a high-performance, cost-effective inference service, and that's what Amazon Bedrock provides. Bedrock not only provides the best selection of leading models as superior performance and with the governance and security controls the companies need, it's also continuing to grow incredibly quickly. It's the same story when it comes to the rise of agents, he suggested: In addition to leading model building and inference services, customers need easier ways to build, run and leverage agents. For example, even if you've built an agent, you have a lot of muck to worry about. A production agent needs somewhere secure to run, memory, so it holds context, and identity, so it can act on a user's behalf, tools and data to connect to and a way to watch what it's doing once real traffic hits. Stitching all that together reliably is hard and it stalled many production deployments. It's why we built Bedrock AgentCore. While companies will construct their own purpose-built agents from the ground up, most will also use turnkey agentic services. Coding agents are a good example and there are several successful ones, including Claude Code, Codex and our own spec-driven Kiro, which is up to 50% more cost effective than others and tripled in usage quarter-over-quarter. Another of these agentic services is Amazon Quick, an intelligent AI work companion that helps you manage, search and automate your digital workload across e-mail, calendar, local or cloud files and custom workflows. Unlike other offerings in this space, Quick also lets you manage across leading SaaS tools like Slack, Salesforce, Jira, Teams and ServiceNow. Spend, spend, spend As for that CapEx increase, a development that can still turn Wall Street hostile on a whim, Jassy was defiant, insisting: At this level of spend and higher, we have clear line of sight to strong financial returns. I'll explain why. There are 2 major parts of the investment, the data centers and the servers and networking equipment that go into them. These are different capital cycles. Data center capital is spent starting two years before we can put servers into them to start monetizing. Once a data center opens with servers plugged in, we start generating significant revenue right away and then get to monetize these data centers for 30-plus years without having to spend that start-up capital again. Servers and networking equipment operate on a shorter cycle. We typically purchase these a few months before putting them into service, so we have strong visibility into customer demand before we trigger the spend. If the demand isn't there, we won't spend the capital. He added: For servers and networking equipment, on average, it takes a little less than 3 years to break even on that investment. The servers currently have a useful life of at least 5 to six years. And most of our AI capacity these days is being contracted for at least five-year terms. That means that we're driving significant free cash flow on the servers and networking equipment in the two to three years after we break even. It's also worth noting that AWS has a strong track record of pulling forward breakevens on server equipment, where we've already made meaningful progress and finding ways to extend the useful life of this equipment without sacrificing customer experience. So for our data centers, which have 30-plus year useful lives, we should get at least five to six generations of server economics, like I explained earlier, with subsequent generations after the first having even better overall economics because we don't have to repeat that upfront data center investment. This has implications for budgeting, he notes: in the short term, when demand is necessitating so many data centers being built simultaneously in advance of when we can start monetizing them, we'll spend a lot of CapEx and encounter free cash flow headwinds until these data centers come online, can be monetized and we get a few years into these servers being utilized. But as we get a few years out, the revenue growth outpaces the incremental CapEx growth, which will happen at some point. The resulting revenue, free cash flow and return on invested capital is very compelling. We've done this before in the first era of cloud computing just over a longer time horizon where demand built more gradually than it has in AI but we see the margins and returns in AI tracking what we saw with core at the same point of evolution, actually a little ahead. And if that wasn't enough to finally get the message through to short-termists on Wall Street, he added for good measure a hint that there will be more spending to come: We now believe we will spend approximately $220 billion in cash CapEx in 2026. The higher cost of memory pushing this number up from a prior estimate of about $200 billion. But even at that amount, we will still not have enough capacity to meet all the demand we have in 2026. And I believe this dynamic will also be true in 2027 too. In fact, the demand we already have for 2028 is striking. My take It's a long game. It really shouldn't be as difficult for the red-suspender brigade to get their greedy little heads around as it seems, should it?

Amazon's stock pops on roaring cloud growth and soaring AI demand

Amazon.com Inc. delivered a solid earnings and revenue beat as it posted its second-quarter financial results, driven by surging growth in its cloud infrastructure business. Demand for artificial intelligence was the primary factor in that growth, causing the company to boost its capital expenditure forecast once again. The company reported a stunning earnings beat. It posted a profit of $5.75 per share, crushing Wall Street's forecast of just $1.82 per share, thanks mainly to a $53 billion boost in non-operational income that stemmed from an unrealized gain on its stake in the AI lab Anthropic PBC. Revenue for the period came to $200.61 billion, up 20% from a year earlier and well ahead of the $196.47 billion forecast. All told, Amazon delivered net income of $62.6 billion, including the pre-tax income derived from its investment in Anthropic. That's up from a net profit of just $18.2 billion one year ago. Amazon's cloud computing business, Amazon Web Services, contributed $42.2 billion in revenue, above the Street's $40.54 billion forecast and up 37% from the same period one year ago. That marked the unit's fastest growth since 2021, said Amazon Chief Executive Andy Jassy. Investors were especially keen to see AWS deliver stronger growth after the company's main rivals in the public cloud infrastructure industry delivered strong results of their own. Last week, Google LLC parent company Alphabet Inc. reported growth of 82% for Google Cloud, while Microsoft Corp.'s Azure cloud revenue jumped 43% during the company's fourth quarter. Jassy told analysts on a conference call that AWS is "booming," primarily due to the rapid growth of its AI services and its homegrown chips, which both reached a $25 billion annual revenue run rate. AWS has been heavily promoting its Trainium and Graviton chips as alternatives to Nvidia Corp.'s graphics processing units, and they have become a massive growth driver for the cloud business. Meanwhile, AI platforms like Amazon Bedrock have become key to many enterprise's AI development efforts. Rebecca Wettemann, an analyst at Valoir, told SiliconANGLE that Amazon first began investing in its homegrown chips to insulate itself from a dependence on Nvidia, and has since leveraged those investments to diversify its cloud business. "It's part of an industry-wide hedge to make hyperscalers less dependent on other chipmakers," she said. "As the market swings back and forth between loving and hating picks and shovels, companies that own more of their AI stick should be better positioned regardless of which way the market winds are blowing on a particular day." The market liked what it saw, and Amazon's stock gained more than 9% in late trading. With those gains, it has now recovered from all of its losses and is up 2% in the year to date. Investors were even prepared to forgive Amazon's decision to increase its capital expenditures forecast. The company said it's planning to spend even more on AI infrastructure than it first envisaged, and bumped up its capex forecast to $220 billion this year. Back in February, Jassy had told investors that the company's capex would likely total $200 billion, before holding steady on that forecast in April. However, with the rising cost of things like memory chips, which are vital components of AI servers, the company has had no choice but to increase its budget. Jassy said the company's spending spree isn't going to dry up anytime soon. "Even at that amount, we will still not have enough capacity to meet all the demand we have in 2026, and I believe this dynamic will also be true in 2027 too," he said. "In fact, the demand we already have for 2028 is striking. Amazon had been expected to boost its capex spending after Alphabet did the same last week. However, the company has had to juggle its massive investments on AI infrastructure and services with the need to appease investors who're worried about when the company will see a return on those investments. During the second quarter, its capex bill hit $54.2 billion, up from $32.1 billion in the same period one year before. With such lavish spending, Amazon's free cash flow has now ended up in the red. Its free cash flow for the trailing twelve months amounted to an outflow of $7.6 billion, while it recorded an inflow of $18.2 billion one year earlier. Addressing questions from analysts, Jassy said the ongoing investments are needed so that the company can meet the surging demand for its cloud services. He said that AWS had a backlog of contracted work that has not yet been performed of $496 billion at the end of the quarter. "Amazon's growth numbers should make investors happy, as should the progress it's seeing with Amazon Bedrock," Wettemann said. "Investors are increasingly impatient about AI bets eating cash flow. Hyperscalers that don't show the ROI from their capex investments in terms of real AI growth are suffering." Looking to the current quarter, Amazon is guiding for revenue of between $197 billion and $202 billion, trailing the Street's forecast of $204.1 billion. While that was surprising, the company said there's a good reason for this - namely its decision to switch this year's Prime Day shopping event to June instead of its usual July slot. If the impact of this year's Prime Day and last year's event are taken out of the equation, Amazon's estimated third-quarter growth would be around 400 basis points higher, officials said. While Amazon doesn't disclose its Prime Day revenue, sales across online retailers in the U.S. grew 9% to $26.4 billion throughout the weeklong event. Emarketer analyst Sky Canaves said Prime Day's move to June not only creates a tougher comparison for Amazon's third-quarter forecasts, but also gave it a much larger topline in the second quarter. "It saw a substantial bump in ad revenues from the shift," he said. "But U.S. consumers remain cautious, with shoppers making more purchases but spending less on each item. Amazon's sales of groceries and other essentials are growing meaningfully faster than the rest of its eCommerce business." Amazon also forecast operating income for the third quarter of $22.5 billion to $26.5 billion, with the midpoint of that range falling just shy of the Street's $24.92 billion forecast.

Amazon's AWS posts fastest growth since 2021, citing heavy AI demand

Amazon's cloud segment grew faster than analysts had predicted in the second quarter, with revenue increasing almost 37%, marking the strongest expansion since 2021. The digital commerce company said in a Thursday statement that Amazon Web Services (AWS) generated $42.23 billion in revenue during the June quarter. Analysts surveyed by StreetAccount had been looking for $40.54 billion. The growth rate accelerated from 28% in the first quarter. AWS' artificial intelligence business and the unit's chips each brought in over $25 billion in annualized revenue, more than doubling from last year. Amazon remains a larger force in cloud computing than any other company. Microsoft said Wednesday that revenue from Azure and other cloud services were growing 43%, compared with 40% in the March quarter. The Windows company touted over $100 billion in revenue from Azure and other cloud services over the past 12 months. The equivalent figure for Amazon is $148.40 billion. Alphabet said last week that quarterly revenue from Google Cloud surged about 82% to almost $25 billion, after posting 63% growth in the first quarter. Over the past year, the subsidiary now approaches $78 billion. Following Alphabet's results, it was "although hard to see anyone matching GOOGL's pace of sequential dollar revenue growth, which raises the possibility of share shifts that could be a modest investor concern," Evercore analysts Mark Mahaney and Greg Melich wrote in a Monday note. They recommend buying Amazon stock. AWS has been lucrative for its parent. The subsidiary collected $16.62 billion in second-quarter operating income, well above StreetAccount's $13.62 billion consensus. AWS boasted a 36.8% operating margin for the second quarter, while Google Cloud's was 35.6%. Nearly 61% of Amazon's overall operating profit now comes from AWS. Like its peers, Amazon has been racing to open data centers full of artificial intelligence chips that customers demand. Capital expenditures totaled $54.21 billion in the second quarter, up 68% and more than StreetAccount's $49.35 billion consensus. In the second quarter, AWS said that it would start to host OpenAI models and that Meta would use hundreds of thousands of its Graviton chips in a three-year deal.

Amazon posts more than $62 billion in quarterly profit

Amazon beat Wall Street earnings estimates, driven by better-than-expected cloud-computing growth, a sign the company's artificial intelligence bets are showing results. The Seattle-based tech giant on Thursday reported $200.6 billion in total revenue for the second quarter, a three-month span that ended June 30. It was a 20% increase from last year and beat analysts' predictions by about $3.5 billion. Amazon also reported $62.6 billion in profit, heavily boosted by more than $53 billion from the company's investments in artificial intelligence startup Anthropic. Amazon's closely watched cloud-computing division, Amazon Web Services, reported $42.2 billion in revenue, an almost 37% year-over-year increase. Wall Street estimated cloud revenue would come in at $40.5 billion. "AWS is booming, growing 36.7% year-over-year in Q2 -- our fastest growth in 18 quarters -- and our AI and Chips businesses each eclipsed run rates of more than $25 billion," Amazon CEO Andy Jassy said in a Thursday news release. Amazon's share price rose by as much as 9% in extended trading. This story will be updated.

Amazon Just Revealed How Much It's Spending on AI. Even That Won't Be Enough

Amazon is focusing on advancing its artificial intelligence services, which has paid off in the company's most recent financial results for its second quarter. On Thursday, the company reported $200.6 billion in revenue, up 20 percent year-over-year and a 37 percent growth rate for AWS, the retailer's massive cloud computing platform. AWS sales for the second quarter had the fastest growth rate since 2021, making $42.2 billion in 2026. The company is touting its success and attributing to the increased AI adoption its services, products, and site. "There's a lot to be excited about, and we have much more coming for customers in the second half of the year and beyond," said Andy Jassy, President and CEO of Amazon, in a release. In an earnings call with analysts and investors, Jassy stated that Amazon has now updated its capital expenditure budget for AI to approximately $220 billion for 2026. "Even at that amount, we will still not have enough capacity to meet all of the demand we have in 2026. And I believe this dynamic will also be true in 2027 too. In fact, the demand we already have for 2028 is striking," he said in the call.

Amazon Reports Strong Profits and Net Sales for Q2, Fueled by Robust Growth in Cloud Computing Unit

NEW YORK (AP) -- Amazon delivered strong profits and net sales during its fiscal second quarter, helped by surging growth in its prominent cloud computing unit. The e-commerce and technology company said Thursday that sales in its cloud computing unit called AWS rose 37% during the April-June period, faster than the 28% clip in the previous quarter and marking the fastest rate of growth in 18 quarters. But the Seattle-based company offered a cautious sales outlook for the current quarter. Still, shares rose more than 7% in after-hours trading. In a statement released Thursday, Amazon's CEO and president Andy Jassy said AWS is "booming" and noted that its AI and chips businesses each eclipsed run rates of more than $25 billion. He noted that in stores, the company set record delivery speeds for its Prime members in the first half of the year, noting that 40% more items were delivered either same-day or overnight. "There's a lot to be excited about, and we have much more coming for customers in the second half of the year and beyond," he said. Investors were closely watching Amazon's quarterly earnings to see if the company's $200 billion investment in artificial intelligence, robots, semiconductors and satellites is starting to pay off. The planned expenditure for the year marked a 60% increase from Amazon's $128 billion in capital spending last year and raised concerns among investors. Amazon was among the last of the tech giants to report its earnings results covering the latest three-month period. The reports offer investors a read on AI spending and cloud computing growth across the industry. Google parent Alphabet reported better-than-expected revenue for the second quarter last week, fueled by an 82% increase in its cloud business. But the stock tumbled as the tech giant increased its full-year forecast for capital expenditures to a range of $195 billion to $205 billion. That's up from its previous estimate of $180 billion to $190 billion. Microsoft, which on Wednesday reported stronger profit for the latest quarter than analysts expected, said growth was strong for its Azure cloud business. The company didn't announce a big increase in how much it plans to spend on AI investments. That helped to boost shares. Investors are worried that such spending is eating into companies' cash flows and may not ultimately be worth it if AI doesn't deliver as much productivity and profits as promised. Amazon's results from the latest quarter underscored that demand keeps growing for Amazon's services and technology. In April, Amazon signed big deals with OpenAI, Anthropic and Meta. Amazon announced in April what it called a "major expansion" of its partnership with ChatGPT maker OpenAI one day after the artificial intelligence company said it was loosening its ties to longtime backer Microsoft. Like other retailers, however, Amazon is experiencing higher tariff costs because of President Donald Trump's foreign trade policies. Rising shipping costs as the Iran war affects oil and fuel prices also could cut into the company's e-commerce revenue. Meanwhile, Amazon has been speeding up order delivery times through a combination of robotics, AI technology and more efficient warehousing. In fact, speedier delivery helped Amazon dethrone Walmart in February from its status as the nation's largest company by revenue, according to Fortune, which compiles a ranking of the top 500 U.S. corporations by total revenue for their respective fiscal years. Amazon announced in May it was rapidly opening small order processing hubs in dozens of U.S. and foreign cities for 30 minute deliveries, catering to people who can't or don't want to wait for cough medicine to relieve flu symptoms or tomatoes for tonight's dinner salad. Amazon reported net income of $62.65 billion, or $5.75 per share, in the three-month period ended June 30. That compares with $18.16 billion or $1.68 per share, in the year-ago period. Net sales rose to $200.6 billion from $167.7 billion in the year-ago period. Analysts were expecting sales of $197.03 billion for the latest quarter. Amazon said it expects net sales to be in the range of $197 billion to $202 billion. Analysts expect $203.9 billion, according to FactSet.

Amazon shares surge 13% as cloud growth eases AI spending fears

Amazon shares rose sharply on Fridat after stronger-than-expected growth at its cloud business reinforced investor confidence in the company's AI investments. AWS posted its fastest revenue growth in over four years, while management's upbeat outlook helped ease concerns over the scale of Big Tech's capital spending on artificial intelligence. Amazon shares climbed as much as 13.5% on Friday after robust cloud business growth reassured investors about the company's heavy AI spending, easing concerns that it was falling behind its Big Tech peers, Reuters reported. The stock jumped $31.77 from its previous close of $235.50 to an intraday high of $272.04, marking one of its sharpest single-day gains. US MarketsPowered By As on 31 Jul 2026, 09:23 PM IST S&P 500 Top Gainers Amazon.com268.77(14.13%) DexCom82.69(10.93%) Monolithic Power Systems1,436(9.13%) Alphabet352.31(5.59%) Gainers" S&P 500 Top Losers GoDaddy78.80(-20.66%) Coinbase Global141.35(-13.59%) Corteva80.33(-10.09%) Apple300.82(-9.78%) Losers" Amazon Web Services posted its fastest growth in more than four years, signalling renewed demand and supporting the company's decision to increase planned capital expenditure for 2026 by 10% to $220 billion. The results offered Wall Street fresh evidence that some of Big Tech's massive AI investments are beginning to generate measurable returns. If the gains hold, Amazon could add more than $340 billion to its market value after reporting a 37% increase in second-quarter cloud revenue. Microsoft shares surged more than 15% earlier this week after its cloud business exceeded estimates with 43% revenue growth. However, investors are becoming increasingly selective about Big Tech's mounting AI expenditure, which is expected to exceed $730 billion this year, according to Reuters. "The market is no longer questioning whether AI demand is real. The new dividing line is whether unprecedented spending is producing visible, near-term revenue and margin expansion," Bill Birmingham, managing director at REX Financial, was quoted as saying by the news agency. "The market penalises spending when monetisation is delayed, indirect or difficult to measure." Meanwhile, shares of Meta and Google parent Alphabet fell 7% despite strong revenue growth after both companies raised their capital-spending forecasts and reported sharp declines in free cash flow. "Amazon is earning the right to keep spending. Where others are asking investors to trust that the payoff will come, Amazon showed it this quarter," said Thomas Monteiro, senior analyst at Investing.com. "As long as AWS keeps accelerating and margins hold, the market looks willing to fund the build-out, even with free cash flow in the red." Amazon reported negative trailing 12-month free cash flow of $7.6 billion in the second quarter, compared with positive free cash flow of $18.2 billion a year earlier. However, CEO Andy Jassy reassured investors that Amazon is only pouring money into serving demand that already exists. He said a majority of available Amazon cloud capacity for 2027 and some capacity for 2028 had already been reserved by customers (Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)

Amazon Beats Estimates for Quarterly Cloud Revenue Growth

July 30 (Reuters) - Amazon.com topped market expectations for quarterly cloud ⁠revenue ⁠growth on Thursday on the ⁠back of surging enterprise AI spending, signaling the company's hefty investments were bearing fruit. Revenue at its cloud computing unit, Amazon Web Services, jumped 37% to $42.2 billion in the second quarter ended June 30, compared with analysts' consensus estimate of a 31.21% increase, according to data compiled by LSEG. Shares of the ⁠Seattle, Washington-based ⁠company were up about 6% in extended trading, having risen about 4% during the session. Amazon said it burned $7.6 billion of cash on a trailing twelve months basis in the second quarter, compared to $18.2 billion in free cash flow a year earlier. The strong showing from the world's No. 1 cloud services provider mirrors solid performances from smaller rivals Microsoft and Alphabet's Google, both ⁠of which ⁠comfortably beat Wall Street ⁠estimates for cloud revenue. The upbeat results could help quell some concerns over Big Tech's relentless AI investments -- set to exceed $700 billion this year -- ⁠which have strained cash flows at the traditionally cash-rich companies and sparked worries that they might be overbuilding capacity. Companies, however, have argued that the outlays are crucial to help ease capacity constraints that have prevented them from fully meeting AI-driven demand, pointing to their ballooning contract backlogs. Amazon Web Services ⁠has benefited from a growing roster of partnerships this year, including massive cloud infrastructure ⁠and chip supply deals with OpenAI, Anthropic, Meta, Pinterest and Snowflake. The company said earlier this year that AWS' annual AI revenue run rate has surpassed $15 billion and was growing in a triple-digit percentage range, looking to reassure investors that its investments were generating clear returns. Analysts have said Amazon will be able to sustain that level of growth as more data center capacity comes online over the next several months. In its e-commerce business, Amazon has been rolling out faster delivery services globally and expanding to more ⁠rural areas of the U.S. to draw more shoppers. The company also held its annual Prime Day event in the quarter, running from June 23 through June 26. The online shopping event featuring steep discounts saw customers snap up electronics, appliances and everyday essentials, with an Adobe Analytics estimate pegging total spending at over $26.4 billion. (Reporting by Deborah Sophia in Bengaluru; Editing by Sriraj Kalluvila)

Amazon Stock Soars as Analysts Praise Its Best Quarter in a Decade - Amazon.com (NASDAQ:AMZN)

Amazon Web Services (AWS) growth accelerated to 37% year-over-year, the fastest pace in 18 quarters, while operating income of $27.5 billion beat every published estimate. Analysts pointed to a $496 billion AWS backlog, a raised $220 billion capex guide and management's clearest AI return-on-investment framework yet as reasons to stay bullish. * AMZN stock is soaring. See the chart and price action here. The Bulls Benchmark analyst Daniel Kurnos delivered the most bullish call of the group, raising his target to $400 from $370. After nearly two decades covering Amazon, Kurnos wrote, "this might be one of the most impressive quarters in at least the last 10 years." JPMorgan analyst Doug Anmuth lifted his target to $365 from $330 and called AWS's acceleration "the fastest in 18 quarters." Amazon remains a "Best Idea," he added. KeyBanc Capital Markets raised its target to $350 from $335. Analyst Justin Patterson, CFA, titled his note "Yabba Dabba Doo," a nod to Bedrock's role in reaccelerating cloud growth. Rosenblatt Securities analyst Barton Crockett raised his target to $345 from $332. His note summed up the quarter in one line: AWS "finally joined the AI growth party" after trailing rivals in cloud growth. BofA raised its price objective to $320 from $310 under the headline "AWS acceleration hitting another gear." The team flagged AWS margins up 600 basis points year-over-year as evidence of durable capacity returns. Wedbush Securities analysts Ygal Arounian and Chase Tohanczyn raised their target to $310 from $293. The duo called the print "the cleanest beat among the hyperscalers" in Wedbush's coverage. Needham analysts Laura Martin and Dan Medina maintained a $300 target under the headline "Cloud and Ads Drive Upside." The pair highlighted Bedrock's momentum: Amazon added more customers in 1H26 than in its first two years combined. The Lone Holdout D.A. Davidson analyst Gil Luria held his Neutral rating and $250 price target. His note, titled "AWS Delivers, Capex Guide Moves Higher," acknowledged the beat but flagged Amazon's climbing capital spending as a reason for caution. Common Threads AWS's AI and chip businesses each surpassed $25 billion in annualized revenue, while Graviton commitments nearly tripled quarter-over-quarter. Management also raised 2026 capex guidance by $20 billion to $220 billion. Analysts largely shrugged off negative free cash flow and light third-quarter revenue guidance, attributing the softness to a Prime Day timing shift into the second quarter rather than a demand slowdown. With price targets spanning $250 to $400, Amazon shares near $235.50 imply upside in nearly every covered scenario. Price Target Snapshot AMZN Price Action AMZN Stock Price Activity: Amazon stock was up 13.59% at $267.51 at the time of publication Friday, according to data from Benzinga Pro. Over the past month, AMZN has gained about 9.3% versus a 0.8% decline in the S&P 500 and is up roughly 13% year-to-date compared to the index's 7.8% gain. The stock is trading near its 52-week high of $278.56. This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors. Market News and Data brought to you by Benzinga APIs To add Benzinga News as your preferred source on Google, click here.

Amazon Q2 Earnings: AWS AI Demand Outpaces Capacity Through 2027, Jassy Says

'The demand we already have for 2028 is striking,' Amazon.com CEO Andy Jassy said. Amazon Web Services saw voracious demand for artificial intelligence also fuel growth in its core cloud business in its latest fiscal quarter while the ongoing inflated prices for data center components including memory adds an extra $20 billion to the amount of capital the vendor expects to spend in 2026. "Even at that amount, we will still not have enough capacity to meet all the demand we have in 2026," Andy Jassy, CEO of AWS parent Amazon.com, said Thursday during the vendor's latest quarterly earnings call. "I believe this dynamic will also be true in 2027, too. In fact, the demand we already have for 2028 is striking." Jassy covered the Seattle-based cloud giant's second fiscal quarter earnings Thursday, spanning the three months ended June 30. [RELATED: US Data Center Capacity Will 'Double' Despite 'Local' Concerns; Neoclouds Offer Channel Opportunity] Amazon Raises 2026 Spending Forecast To $220 Billion Duane Barnes, president of Raleigh, N.C.-based solution provider and Cox company RapidScale -- No. 173 on CRN's 2026 Solution Provider 500 -- told CRN in a recent interview that his company is investing in its AWS practice and has achieved around 20 badges with the vendor, including one for agentic AI expertise. "We have got a long history of moving thousands of clients into the public cloud," Barnes said. "We've got eight advisory and consulting practices around infrastructure, cyber security, AI, ML, FinOps, so on and so forth." Barnes' public cloud business has seen increased demand for the solution provider's financial operations (FinOps) expertise as well as cloud migrations from legacy vendors. RapidScale's approach has taken on a new level of importance as customers navigate higher prices for data center components including memory, servers and storage. The goal is figuring out "where should these apps live long term -- probably some mixture of public cloud and private cloud and on prem," he said. "And then you can really get more life out of your infrastructure if you put everything where it should be." Memory Crisis Impacts Amazon Spending Thanks to inflated memory and data center component prices, Amazon raised its expected 2026 spending to $220 billion, Jassy said on the call. Jassy explained on the call that he feels comfortable with the large amount of capital spending because data centers offer 30-plus years of monetization without additional startup capital, with servers and networking equipment breaking even in less than three years, and customers usually contract AI capacity for at least five years. Jassy foresees five to six generations of those server economics, with subsequent generations having better economics without additional data center investment. Jassy said that Amazon's emerging AI business is "a little bit ahead" of the same margin trajectory as the core cloud business, also making the CEO feel comfortable with the high level of spending. Amazon's cash capital expenditures in the second quarter was $53.1 billion, mostly for AWS and generative AI. AWS Revenue Jumps 37 Percent As AI Fuels Cloud Growth Amazon saw growth in its own AI products and services while overall growth in AI inferencing helped AWS grow net sales in the quarter 37 percent year on year, the fifth straight quarter of accelerated growth and the fastest growth in 18 quarters, according to the vendor. Its annualized revenue run rate hit $169 billion and it added $4.6 billion in revenue quarter on quarter, 80 percent above the previous largest increase. That ARR would place AWS 24th on the Fortune 500 list if it were a standalone company, Jassy said on the call. AI is helping push AWS to a $1 trillion annual revenue business. AWS segment sales grew 37 percent year on year to $42.2 billion. Backlog for AWS is at $496 billion, up triple digits year on year. Jassy credited the growth to AWS' broad functionality across core cloud use cases and AI, its operational performance, security and users choosing AWS for bringing inference workloads to production. The CEO said that the classic cloud computing market still has room to grow, with 85 percent of global IT spending remaining on premises. "That equation is going to flip in the next 10-to-20 years," he said. "You see more enterprises that are moving and building plans to move to the cloud, and we're winning the lion's share of those." Amazon AI Business Surpasses $25 Billion Annual Run Rate Amazon's AI business surpassed a run rate of more than $25 billion, marking triple-digit percentage growth year on year. The CEO pointed to growing demand in the vendor's own AI products and services, with Amazon Bedrock -- the fully managed generative AI application-building platform -- now serving hundreds of thousands of customers. Bedrock added more customers in the last six months than in the first two years after launch. Customers spent more in the second quarter than all prior quarters combined, Jassy said. Although Amazon's AI business has been successful so far without a frontier AI model, Jassy said the vendor will continue to build one would allow greater control over costs, speed and models' priorities. "We're trying to drive costs down for customers, and having a player like ourselves always focused on trying to take the price, performance and cost out for customers all the time we think will help keep the model more cost effective for customers," he said. "Within the next few years, you're going to have at least half a dozen models that are comparably good to each other. They'll all be in Bedrock and one of them will be ours." Jassy attributed some of Bedrock's success so far to customer desire for model variety and model choice. "There is not going to be one model to rule the world," the CEO said. Amazon's Kiro coding agent tripled in usage quarter-over-quarter, Jassy said. He opened the possibility for more AI applications by Amazon in the future, saying that "we see a very substantial opportunity both for our customers and for AWS in building some of these agentic applications." "There are several others that we're working on, and we think it's going to be very helpful for customers and our business," Jassy said. Trainium, Graviton Power Amazon's AI Infrastructure Strategy Like how Amazon is investing in a frontier model akin to ones offered by OpenAI, Anthropic and other leading AI research labs to help drive down costs, the vendor hasn't slowed down on making its own semiconductors as well. The Amazon chips business posted results like those of the AI division, with chips surpassing a run rate of more than $25 billion, marking triple-digit percentage growth year on year. AWS reported more momentum in its Trainium AI chips during the quarter, with multi-year, multi-gigawatt commitments from Anthropic and its rival OpenAI. Amazon's Graviton5 Arm-based cloud processor has reached a 98 percent share of AWS' top 1,000 Elastic Compute Cloud (EC2) customers, according to the vendor. Revenue commitments grew nearly threefold quarter on quarter. Graviton5 is growing nearly twice as fast as Graviton4 did and delivers up to 25 percent better compute performance. AI growth has led to core cloud business growth thanks to post-training, reinforcement learning and agentic tool use on cloud-delivered central processing units (CPUs) as opposed to AI accelerators. This also bodes well for Amazon's own Graviton CPUs, he said. AWS is still on track to double the power capacity it had in 2025 by the end of 2027, with no AI demand slowdown in sight, the CEO said. "We're still in the relative early stages of how much demand there's going to be for AI," he said. "It's going to change every customer experience that we know. I think it will invent all sorts of new ones that we never imagined." Asked about whether Amazon would sell Trainium chips to customers separate from its cloud, Jassy said that "we're actively having those conversations and exploring, and I expect there's a real chance we'll do that in the future." Amazon's investment in first-party chips helps make the vendor "unusually well positioned for the AI inflection," Jassy said. The CEO also reiterated Amazon's deep partnership with Nvidia, a semiconductor manufacturer that Amazon could someday potentially challenge with its own chips portfolio. Amazon Q3 Outlook Amazon still has an eye on bleeding-edge markets outside of AI, with the completion of four additional launches for its Leo low Earth orbit satellite network during the quarter. That brings the total constellation to nearly 400 satellites in orbit with satellite internet service expected to start this year. Amazon reported that its second quarter net income of $62.6 billion, more than triple the $18.2 billion reported in net income for the same period a year prior, includes income from its investments in Claude maker Anthropic. That income "primarily" contributed to non-operating pretax other income of $53.4 billion. For the third fiscal quarter, Amazon expects to see net sales between $197 billion and $202 billion in its third fiscal quarter, up 9 percent to 12 percent year on year. Those figures include all of Amazon's businesses including its e-commerce division. Operating income should land between $22.5 billion and $26.5 billion, up about 30 percent to 52 percent year on year. Amazon's stock jumped 9 percent in after-hours trading, with the stock trading at about $260 a share.

AI Boost: Amazon shares jump on blockbuster earnings, upbeat outlook - AWS delivers fastest growth in years

AI Boost: Amazon shares jump on blockbuster earnings, upbeat outlook 1/4 AWS delivers fastest growth in years Amazon Web Services (AWS) continued to power the company's growth, with revenue rising 37% year-on-year to $42.2 billion. The cloud division posted its fastest growth rate in more than four years as businesses increased spending on AI infrastructure and cloud services. The performance reinforced AWS' position as Amazon's biggest profit engine. 2/4 AI and chip businesses hit $25 billion run rate CEO said Amazon's AI-related businesses are scaling rapidly. The company's AI services and custom chip operations have each reached an annualized revenue run rate of more than $25 billion. Demand for Trainium AI chips and Graviton processors continues to rise as enterprises expand AI workloads. 3/4 Amazon steps up AI spending Amazon announced plans to increase its 2026 capital expenditure by $20 billion, taking total planned investments to about $220 billion. The additional spending will be directed toward AI data centers, custom chips and cloud infrastructure to meet growing customer demand. Investors welcomed the company's willingness to invest aggressively in AI despite near-term pressure on free cash flow. 4/4 Why Wall Street cheered The earnings report strengthened investor confidence that Amazon's heavy AI investments are beginning to deliver meaningful returns. Faster AWS growth, rapidly expanding AI businesses and a bold infrastructure investment plan signaled strong long-term growth potential. The results further cemented Amazon's position as one of the leading beneficiaries of the global AI boom.

Amazon Puts AI Agents to Work as Sales Top $200 Billion | PYMNTS.com

By the end of Q2, Amazon had AI agents helping people shop, organizing employees' digital work, supporting contact centers and scanning software for security weaknesses. The company's earnings announcement Thursday (July 30) showed Alexa as one of the clearest examples. Amazon combined Rufus and Alexa+ in Alexa for Shopping, an agentic assistant that can recommend and compare products, provide price histories and automate purchases through price alerts and Auto-Buy. Active users nearly doubled during the quarter, according to the company, while interactions increased more than fivefold from a year earlier. U.S. customers who use Alexa for Shopping spend more than 40% more per order than those who don't, Jassy said. Amazon is also putting agents to work inside businesses. Jassy referred several times to Amazon Quick. It's a new agent that can search email, calendars, files and company systems, then take actions such as scheduling meetings, sending messages, updating customer records and building dashboards. Amazon added autonomous agents that users can create in plain language to complete multistep assignments in the background. The product grew out of Amazon employees' own demands. Jassy said Quick initially helped workers summarize documents, conduct research and analyze business information. Employees then pushed the company to connect the tool with email, Slack and calendars. "It's pretty remarkable not only how fast it's taken off inside Amazon, but how many external enterprises have put it into production with a very large number of people at their companies," Jassy said. That internal-to-external path helps explain Amazon's broader AI strategy. The company builds tools to solve its own operational problems, then sells those capabilities to businesses through Amazon Web Services. Jassy said Amazon sees "a very substantial opportunity" in building agentic applications for customers and AWS. Amazon Connect, its contact-center platform, is used by major airlines, banks and healthcare companies and continues to grow quickly. The company has also added payments to Bedrock AgentCore, allowing agents to execute transactions autonomously. Moving to Frontier Models The first analyst question on the call turned to frontier AI, the most advanced class of artificial intelligence models. The analyst asked whether Amazon needed a leading model of its own even though Bedrock lets AWS customers choose among models from several providers. This week the company thinned the ranks of its AI models. Jassy's answer was direct: "There is not going to be one model to rule the world." Different models will move ahead at different times, he said, and companies building important AI applications will want access to multiple options. That puts the emphasis on Bedrock's selection, price, security and governance rather than on Amazon owning the top model at any given moment. Still, Amazon is developing its own frontier model. Jassy said doing so would give the company more control over costs for its consumer applications and help lower costs for AWS customers. Bedrock's momentum supports the multimodel strategy. Customers spent more on the service during Q2 than in all previous quarters combined. Amazon's AI business and chip business each passed annual revenue run rates of $25 billion, with both growing at triple-digit percentages. Three other businesses showed how Amazon is combining speed, selection and automation: Grocery: Jassy said Amazon's grocery business generated more than $150 billion in merchandise sales last year, making it the second-largest U.S. grocer. Monthly active customers buying perishables increased more than 50% since the beginning of the year. Same-day orders containing perishables average more than three times as many items as other orders. Logistics: Amazon delivered more than 40% more items the same day or overnight during the first half than it did a year earlier. Its Amazon Now service, which promises delivery in 30 minutes or less, expanded to 80 additional U.S. cities and towns. Amazon also introduced Supply Chain Services so outside businesses can use its network to move, store and deliver goods. Pharmacy: New Amazon Pharmacy customers more than doubled during the first six months while same-day prescription deliveries increased nearly fivefold. Automatic manufacturer discounts saved customers nearly $250 million in out-of-pocket costs, up more than 400% from a year earlier. Amazon's financial results showed the scale funding that expansion. Second-quarter sales rose 20% to $200.6 billion while operating income increased 43% to $27.5 billion. AWS sales climbed 37% to $42.2 billion, its fastest growth in 18 quarters, and AWS operating income reached $16.6 billion. Net income rose to $62.6 billion, though that included $53.4 billion in pre-tax nonoperating income tied primarily to Amazon's Anthropic investment. Free cash flow swung to a $7.6 billion outflow over the trailing 12 months as spending on property and equipment rose sharply, primarily to support AI.

Amazon's AWS Earnings Preview: 5 Big AI Sales, Anthropic And Nova Things To Know

From Wall Street's AWS revenue prediction to Amazon's $200 billion CapEx spending and the future of its Nova AI model family, here are the five biggest things to know ahead of Amazon's second-quarter 2026 earnings report Thursday. Amazon's second-quarter financial earnings report Thursday will answer key questions about AWS' sales growth driven by AI, if Amazon plans to stick with its $200 billion CapEx spending goal in 2026 and the future of AWS' AI model family, Nova. "We continue to view AWS growth as the key metric driving sentiment as investors wrestle with the returns on the massive infrastructure buildout," said KeyBanc Capital Markets analyst Justin Patterson in an investor note. CRN breaks down the five big things AWS partners, investors and customers need to know ahead of Amazon's earnings results for its second quarter of 2026 on July 30 at 5 p.m.ET. AWS Q2 2026 Earnings Prediction: $40.5 Billion To $41 Billion In Revenue Wall Street analysts, including Bank of America and Goldman Sachs, believe AWS revenue growth will increase by 33 percent year over year in the second quarter, predicting AWS generated around $41 billion in total revenue. Other analysts are projecting AWS to have generated $40.5 billion in the second quarter, representing a 31 percent increase from the $30.8 billion the company reported in the second quarter of 2025. [Related: The 10 Coolest New AWS Tools, Products And AI Innovation Of 2026] AWS generated a 28 percent revenue increase year over year during the first quarter of 2026. The Takeaway: If AWS reports a 31 percent to 33 percent year-over-year sales increase for the second quarter of 2026, it would be the highest sales rate increase in four years. Amazon Potentially Increasing Or Decreasing $200 Billion CapEx Spending Plan Amazon's plan is to spend about $200 billion on CapEx in 2026, mostly around AI infrastructure and data centers to increase its compute capacity. A $200 billion CapEx spending bill for 2026 would mark an increase of 52 percent compared with the $131 billion in CapEx spending in 2025. Amazon's massive spending should translate into more compute capacity, which allows more customers to buy more AWS computing. In comparison, during Google's second-quarter 2026 earnings report last week the company raised its 2026 CapEx forecast to $195 billion to $205 billion, up from $180 billion to $190 billion. Google executives said the company remains in a supply-constrained environment. The Takeaway: It will be interesting to see if Amazon increases or decreases its $200 billion CapEx forecast for 2026, which will show just how much demand there is in the market today -- and in the pipeline -- for its computing. AWS Margins Possibly Lowering Wall Street analysts' consensus estimate is that AWS' operating margin will be around 33.8 percent in the second quarter of 2026. In the first quarter od 2026, AWS' operating margin was 37.7 percent. If analysts' consensus is accurate, a 33.8 percent margin would represent a 390-basis- point decrease quarter over quarter. The Takeaway: An AWS margin decrease could have occurred due to increased expenses for areas such as chips and energy. If this is the case, ongoing AWS margin pressure could outweigh solid cloud growth results. Anthropic Momentum In Financial Results Bank of America estimates that Anthropic-related workloads on AWS alone could have added over $1.5 billion in sequential AWS sales growth during the second quarter of 2026. This year, red-hot AI startup Anthropic signed a $100 billion agreement with AWS to secure up to 5 GW of capacity for training and deploying Claude. Anthropic and AWS also deepened their partnership by enabling Claude to run on Amazon Bedrock. Amazon, for its part, will invest $5 billion in Anthropic with up to an additional $20 billion in the future. The Takeaway: Listeners should focus during the Amazon earnings call on what executives say about Anthropic momentum and any impact it had on AWS' bottom line. AWS Nova Models And Trainium Updates There are a few key AWS products that should be discussed during Amazon's second-quarter 2026 earnings call, which include its AI model Nova family and custom Trainium chips. Less than two years after Amazon unveiled its Nova family of AI models, Reuters reported this week that the company is winding down its flagship AI models with the goal of focusing on a new frontier-model effort. In addition, Amazon's chips division -- including Graviton, Trainium and Nitro -- surpassed a $20 billion annualized run rate in the first quarter of 2026, growing at triple-digit percentages year over year. Trainium3 chips started shipping this year, while its upcoming Trainium4 chip already has a large portion of its capacity reserved by customers. The Takeaway: AWS should provide an update to its AI model strategy with Nova during the call, as well as give financial updates to its chip -- particularly Trainium -- momentum.

JPMorgan Raises Amazon Stock Price Target After Earnings

Amazon (AMZN) stock blasted off post-earnings as Wall Street celebrated evidence that its whopping artificial intelligence (AI) spending was producing a measurable payoff. For the most part, investors were bracing for another quarter marred by fears of capital expenditure and questions about whether AWS could grow quickly enough to justify the buildout. Instead, cloud sales rose sharply, operating profit expanded, and backlog climbed to a record level. On the flip side, as I reported on Alphabet (GOOGL), Amazon's cash flow deteriorated as infrastructure spending soared. However, backed into a corner, Amazon delivered its strongest growth numbers in years. That shift led JPMorgan to reassess the stock's earnings power and the durability of its AI investment cycle. At the heart of the reset is a question of whether AWS can convert booming demand into sufficient long-term profit to outweigh Amazon's severe near-term cash burn. Why JPMorgan sees an AWS inflection, not just an earnings beat JPMorgan analyst Doug Anmuth bumped Amazon's price target to $365 from $330, retaining an Overweight rating and keeping the stock in his Best Idea list. For context, that is nearly a 34.4% upside from current prices. The bank's thesis centered on Amazon's breathtaking top-line growth. Amazon's overall sales were up 20%, its fastest growth in 20 quarters, while its cloud behemoth AWS grew 37%, its fastest rate in 18 quarters. More importantly, AWS backlog reached $496 billion, rising 36% sequentially and nearly 2.5 times year over year, offering investors a ton of visibility into future cloud sales. On top of that, AWS's AI and custom-chip businesses, spearheaded by its Graviton CPU, posted an eye-catching $25 billion annual sales run rate. Growing at a triple-digit clip. Additionally, AWS's operating income surged 64% to $16.6 billion, while its operating margin expanded to 39.4%. Hence, AWS carried nearly 61% of Amazon's consolidated operating profit, despite accounting for one-fifth of revenue. For perspective, though, AWS's 37% growth was the slowest among the cloud czars, trailing Microsoft Azure and other cloud services at 43% and Google Cloud at 82%. Consequently, Anmuth and his team argue that Amazon is showing concrete evidence of booming AI demand rather than simply making promises. That's why they're comfortable assigning a lofty 32-times multiple to 2027 earnings, which would require at least a 10% increase in their previous EPS estimate to $11.41 to support a $365 price target. How much did Amazon stock gain after earnings? Amazon reported Q2 earnings after the market closed on July 30. Following the release, the stock surged 15.3% on July 31, closing at $271.58, its biggest one-day gain since 2012, according to WSJ reporting. After Amazon's stock shot up, the rally added roughly $388 billion in shareholder value, with its market cap at $2.95 trillion, according to CompaniesMarketCap. According to Seeking Alpha data, Amazon shares gained 17% over the past week and 14% over the past month, outperforming the S&P 500's 1% gain and 0.1% decline, respectively. The stock is also up 18% year-to-date, versus a 9.4% increase for the S&P 500. Does Amazon's earnings guidance support the bull case? For Amazon investors, forward guidance left a lot to be desired. Amazon expects Q3 sales of $197 billion to $202 billion, representing 9% to12% growth, and operating income of $22.5 billion to $26.5 billion. However, it's important to note that Prime Day moved into Q2, which creates a tough comparison. Amazon said Q3 growth would be almost 4 percentage points higher after excluding the timing effect from both years. The bigger challenge, though, is CapEx. Amazon bumped its 2026 CapEx to nearly $220 billion from $200 billion, driven by higher memory costs. However, even at that level, CEO Andy Jassy said Amazon would face capacity constraints. "The higher cost of memory is pushing this number up from our prior estimate of about $200 billion. Even at that amount, we will still not have enough capacity to meet all the demand we have in 2026, and I believe this dynamic will also be true in 2027, too," he said. Nevertheless, that spending pushed its trailing-12-month free cash flow from a positive $18.2 billion figure a year ago to a $7.6 billion outflow. Amazon linked that to a massive $66.1 billion year-over-year increase in property and equipment purchases, net of proceeds and incentives. Although operating cash flow remained strong, rising 33% to $161.4 billion, infrastructure spending consumed far more cash than the business generated after capital investment. Be that as it may, JPMorgan's position is that the cash-flow deficit is essentially a timing mismatch instead of a failure on the tech giant's part. Amazon spends roughly 2 years on data centers before it starts generating revenue. Jassy said those facilities operate for around 30 years, while AI servers can recoup their costs in less than three years and continue generating profits afterward. For the bull case to hold, the committed demand needs to convert into sales quickly enough for AWS growth and operating profits to offset the increase in depreciation. Wall Street price targets for Amazon stock after earnings Most Wall Street firms remained relatively bullish on Amazon stock post-earnings, broadly celebrating Amazon's AWS acceleration. Goldman Sachs was perhaps the most upbeat of the lot, arguing that the tech giant deserved a far more substantial re-rating, and not just higher earnings estimates. On the flip side, Bank of America was much more cautious than Goldman Sachs about Amazon's AI growth. It's looking for much more evidence that the company can effectively translate its tremendous AI spending into strong, lasting cash flow. * Goldman Sachs: $375, raised from $335 with a Buy rating, on the back of stronger AWS growth, AI demand, and advertising momentum, boosting Amazon's earnings outlook. * Truist Securities: $350, raised from $320 with a Buy rating following Amazon's results, underscoring greater confidence in cloud growth and AI infrastructure demand. * Morgan Stanley: $335, raised from $330 with an Overweight rating after AWS posted accelerating growth, stronger bottom-line numbers, and an improved backlog. * RBC Capital: $330, raised from $320 with an Outperform rating, citing Amazon's accelerating AWS growth following the quarter. * Bank of America: $320, raised from $310 with a Buy rating after Amazon's cloud business comfortably exceeded expectations. * Wall Street consensus: $320.18, representing 17.9% upside, according to Seeking Alpha's analyst-consensus data. Sources: MarketBeat, Investing, Seeking Alpha. Investor Takeaway on Amazon stock Amazon bulls are compelling investors to cut through the noise of all the cash flow troubles and focus on the economic value created by AI. That argument has a lot of merit because, especially with AWS, it doesn't seem like the company is spending defensively to protect a fading cloud franchise. In fact, it is investing in demand that already exceeds available capacity. Nevertheless, investors shouldn't treat the post-earnings rally as essentially proof that the capital spending cycle is de-risked. For now, the most important indicators to focus on are AWS growth, cloud operating margins, backlog conversion, and free cash flow direction. Additionally, it is also important to monitor whether Amazon's custom chips lower computing costs, whether AI customers expand usage after initial deployments, and the management's ability to eventually reduce capital spending as a percentage of sales. Hence, for those invested in Amazon stock, it might not be wise to chase the stock following a post-earnings pop. Those looking to wager on the tech giant should probably wait for a better entry point. The Arena Media Brands, LLC THESTREET is a registered trademark of TheStreet, Inc. This story was originally published August 2, 2026 at 7:07 AM.

Cloud Business Showers Profits for Hyperscale Giants Amazon, Microsoft & Google

However, analysts continue to be wary of their unbridled capacity expansion plans aimed at building up AI infrastructure It took just two days of quarterly earnings to remove all concerns over AI's impact on the hyper-scale cloud business. The June quarter saw Google, Microsoft and Amazon generating a large uptick in cloud revenues. If are concerned their unbridled capex plans for the rest of 2026, the companies are taking it in their strike. While the retail investors remained on-the-edge for Google and to some extent Microsoft, Amazon's quarterly earnings appeared to enthuse them. The last of the Big-3 to report their numbers - a 37% growth in the AWS cloud unit during the quarter that more than doubled its growth rate during the same period in 2025. Even more striking was AWS' operating profit margins that rose to 39.4% - its highest since the beginning of 2025. Share prices jumped 9% in response indicating that accelerating growth meant more than capex infusion to drive it. A spike in operating margins while tackling the depreciation expenses on chips and servers went down well with Wall Street. Before moving further, let's take a quick look at how Amazon's closest competitors fared during the quarter. Google's parent company Alphabet was the first off-the-blocks with their revenue numbers that rose 24% year-on-year to $119.8 billion. Cloud revenues grew a massive 82% over 12 months to $24.8 billion with a further backlog expansion to $514 billion. Microsoft added $50.1 billion in revenues for this fiscal year, of which $31 billion came from server products and cloud services - a whopping 62% of the growth. CEO Satya Nadella told analysts over an earnings call that Microsoft Azure passed $100 billion in annual revenues for the first time. It stood at $129.4 billion, accounting for about 40% of its annual revenue. Truly, the cloud services was raining dollars for all three hyperscale operators in the business. But, now comes the concerning numbers. Google raised its full-year (2026) spending forecast to a range of $195 billion to $205 billion, but CEO Sundar Pichai also noted that for the first time they recognised TPU chip direct sales revenue numbers. Expect real growth next year! Capital expenditures over the year thus far has been unbridled. Amazon burned $7.6 billion in cash during the quarter and raised its Capex projection by $20 billion to $220 billion. But, all for a good cause. Morgan Stanley recently suggested that Big Tech will spend over $700 on AI and possibly grow this number beyond $1 trillion in 2027. In fact, all the cloud firms are justifying their heavy capex spends on the growing demand from the AI ecosystem. Amazon boss Andy Jassy went one better over his counterparts by detailing how his company could benefit. He said AWS already has customers reserving compute capacity for 2028. In fact, Jassy addressed the investor concerns over a free cash flow shortfall of $7.6 billion directly. He noted that datacentres need capital two years before servers are installed and revenue generation begins. However, once the floodgates open, monetisation for over three decades without any upfront cost repeating itself is a given, he opined. "We'll spend a lot of capex and encounter free cash flow headwinds until these datacentres come online, can be monetized, and we get a few years into these servers being utilized," Jassy said. He also noted that while AWS takes as much as three years to get returns on its investment on servers and networking technology, it could still drive "significant free cash flow" on that hardware for at least the next two or three years, given that the equipment themselves have roughly five-year life. Jassy also reminded investors that most of Amazon's AI capacity is contracted for five years and if one were to assume that demand continues (even if the pace slows down a bit), AWS could continue to register strong growth over the next few years. Of course, we do not expect Jassy or his counterparts at Microsoft and Google to gaze into their respective crystal balls and tell us more about their long-term outlook on the AI circus. The tech giant's overall revenues in the second quarter stood at $200.6 billion, representing a 20% increase while operating income stood at $27.5 billion (up 43%). No wonder Wall Street is happy as their expectations were lower at $196 billion in revenues. Profits stood at $62.6 billion and translated to $5.75 per share. Of course, one cannot discount the $53.4 billion in pre-tax gains from their investment in Anthropic. Take those gains away and the earnings per share would have dropped to $1.95 or thereabouts, which is still slightly higher than what market analysts expected. Jassy is confident that AWS is booming as also the fact that their chip business now has a run rate of $20 billion or thereabouts. Looks like Jeff Bezos' fourth pillar is being built.

Amazon AI investment: Amazon to boost spending on AI and other technology by $20 billion after strong Q2 results

The Seattle-based company said Thursday that sales in its cloud computing unit called AWS rose 37% during the April-June period, faster than the 28% clip in the previous quarter and marking the fastest rate of growth in 18 quarters. Amazon said it will be increasing this year's capital spending on technology, mostly artificial intelligence, by an additional 10% after the tech and e-commerce giant delivered strong profits and net sales during for fiscal second quarter, helped by surging growth in its prominent cloud computing unit. The Seattle-based company said Thursday that sales in its cloud computing unit called AWS rose 37% during the April-June period, faster than the 28% clip in the previous quarter and marking the fastest rate of growth in 18 quarters. CEO and President Andy Jassy disclosed to investors on the call that Amazon now expects capital spending to total $220 billion, which also includes outlays on robots, semiconductors and satellites. That's up from the $200 billion investment plan that was announced in February and well above the $128 billion in capital spending for all of last year. Jassy cited the higher cost of memory chips as the main reason for the increase. Jassy told investors that even at the $220 billion level, Amazon will not have enough capacity to meet all of the demand it has this year. "I believe this dynamic will also be true in 2027 too," he added. "In fact, the demand we already have for 2028 is striking." Still, shares rose more than 9% in after-hours trading. Investors had been closely watching Amazon's quarterly earnings to see if the company's big spending on AI is starting to pay off. The Seattle-based company offered a cautious sales outlook for the current quarter. Amazon was among the last of the tech giants to report its earnings results covering the latest three-month period. The reports offer investors a read on AI spending and cloud computing growth across the industry. Google parent Alphabet reported better-than-expected revenue for the second quarter last week, fueled by an 82% increase in its cloud business. But the stock tumbled as the tech giant increased its full-year forecast for capital expenditures to a range of $195 billion to $205 billion. That's up from its previous estimate of $180 billion to $190 billion. Microsoft, which on Wednesday reported stronger profit for the latest quarter than analysts expected, said growth was strong for its Azure cloud business. The company didn't announce a big increase in how much it plans to spend on AI investments. That helped to boost shares. Investors are worried that such spending is eating into companies' cash flows and may not ultimately be worth it if AI doesn't deliver as much productivity and profits as promised. In a statement released Thursday, Jassy said AWS is "booming" and noted that its AI and chips businesses each eclipsed run rates of more than $25 billion. He noted that in stores, the company set record delivery speeds for its Prime members in the first half of the year, noting that 40% more items were delivered either same-day or overnight. "There's a lot to be excited about, and we have much more coming for customers in the second half of the year and beyond," he said. Amazon's results from the latest quarter underscored that demand keeps growing for Amazon's services and technology. In April, Amazon signed big deals with OpenAI, Anthropic and Meta. Amazon announced in April what it called a "major expansion" of its partnership with ChatGPT maker OpenAI one day after the artificial intelligence company said it was loosening its ties to longtime backer Microsoft. Like other retailers, however, Amazon is experiencing higher tariff costs because of President Donald Trump's foreign trade policies. Rising shipping costs as the Iran war affects oil and fuel prices also could cut into the company's e-commerce revenue. Meanwhile, Amazon has been speeding up order delivery times through a combination of robotics, AI technology and more efficient warehousing. In fact, speedier delivery helped Amazon dethrone Walmart in February from its status as the nation's largest company by revenue, according to Fortune, which compiles a ranking of the top 500 U.S. corporations by total revenue for their respective fiscal years. Amazon announced in May it was rapidly opening small order processing hubs in dozens of U.S. and foreign cities for 30 minute deliveries, catering to people who can't or don't want to wait for cough medicine to relieve flu symptoms or tomatoes for tonight's dinner salad. The company said Thursday that for the first six months of the year it more than doubled the number of new customers for its online pharmacy service, while same-day prescription deliveries were up nearly five times. Amazon also pushed up its big four-day sale event known as Prime Day to June from July this year. Amazon reported net income of $62.65 billion, or $5.75 per share, in the three-month period ended June 30. That compares with $18.16 billion or $1.68 per share, in the year-ago period. Net sales rose to $200.6 billion from $167.7 billion a year ago. Analysts were expecting sales of $197.03 billion for the latest quarter. Amazon said it expects net sales to be in the range of $197 billion to $202 billion. Analysts expect $203.9 billion, according to FactSet.

Amazon beats estimates for quarterly cloud revenue growth

Amazon.com topped market expectations for quarterly cloud revenue growth on Thursday on the back of surging enterprise AI spending, signaling the company's hefty investments were bearing fruit. Revenue at its cloud computing unit, Amazon Web Services, jumped 37 per cent to $42.2 billion in the second quarter ended June 30, compared with analysts' consensus estimate of a 31.21 per cent increase, according to data compiled by LSEG. Shares of the Seattle, Washington-based company were up about 6 per cent in extended trading, having risen about 4 per cent during the session. Amazon said it burned $7.6 billion of cash on a trailing twelve months basis in the second quarter, compared to $18.2 billion in free cash flow a year earlier. The strong showing from the world's No. 1 cloud services provider mirrors solid performances from smaller rivals Microsoft and Alphabet's Google, both of which comfortably beat Wall Street estimates for cloud revenue. * Latest technology news on BNNBloomberg.ca The upbeat results could help quell some concerns over Big Tech's relentless AI investments -- set to exceed $700 billion this year -- which have strained cash flows at the traditionally cash-rich companies and sparked worries that they might be overbuilding capacity. Companies, however, have argued that the outlays are crucial to help ease capacity constraints that have prevented them from fully meeting AI-driven demand, pointing to their ballooning contract backlogs. Amazon Web Services has benefited from a growing roster of partnerships this year, including massive cloud infrastructure and chip supply deals with OpenAI, Anthropic, Meta META.O, Pinterest PINS.N and Snowflake SNOW.N. The company said earlier this year that AWS' annual AI revenue run rate has surpassed $15 billion and was growing in a triple-digit percentage range, looking to reassure investors that its investments were generating clear returns. Analysts have said Amazon will be able to sustain that level of growth as more data center capacity comes online over the next several months. In its e-commerce business, Amazon has been rolling out faster delivery services globally and expanding to more rural areas of the U.S. to draw more shoppers. The company also held its annual Prime Day event in the quarter, running from June 23 through June 26. The online shopping event featuring steep discounts saw customers snap up electronics, appliances and everyday essentials, with an Adobe Analytics estimate pegging total spending at over $26.4 billion.

Amazon earnings analysis: questions answered and next catalysts By Investing.com

Investing.com -- Amazon.com Inc (NASDAQ:AMZN) just delivered one of its most notable beats in recent memory -- EPS of $5.75 crushed the $1.81 estimate by +218%, sending AMZN up +14.9% to $270.58 today. AWS growth hit its fastest pace in 18 quarters at 36.8% YoY, cementing Amazon's position as the dominant AI infrastructure play in the cloud. The Numbers That Shocked Wall Street Amazon.com (AMZN): Trading at $270.58 (+14.90% today) || Q2 Revenue: $200.6B (+20% YoY, beat est. $196.5B) || Operating Income: $27.5B (+43% YoY) || AWS Revenue: $42.2B (+36.8% YoY) Two caveats worth noting: the EPS beat included ~$1.2B in one-time items ($600M tariff refunds + $600M energy contract fair value gains), so the "real" beat was still substantial but not quite the headline +218%. Operating margin hit 13.7%, beating the FactSet consensus of 12.0% by 170 basis points. Read full transcript Questions the Quarter Answered 1. Is AWS reacceleration real? Definitively yes. At $42.2B in quarterly revenue (annualized run rate of $169B), AWS grew 36.8% -- the fastest rate in 18 quarters. The backlog hit $496B, growing triple digits YoY. The demand is structural, not cyclical. 2. Can AI chips become a meaningful business? The AWS chips unit crossed $25B in annualized revenue, with Trainium securing multi-year commitments from Anthropic and OpenAI. Graviton CPU is now used by 98% of the top 1,000 EC2 customers. Amazon has built one of the most valuable silicon businesses on the planet. 3. Is retail margin expansion sustainable? North America operating leverage continues to improve alongside a 26% increase in advertising revenue to $19.8B -- the highest-margin segment within retail. Amazon now claims to be the 2nd-largest grocer in the U.S. at $150B+ in grocery sales. 4. Can CapEx scale responsibly? Guidance raised to $220B for full-year 2026 -- up from $200B -- primarily due to rising memory costs. Management's $1T AWS revenue vision justifies the spend thesis, though it tests investor patience. CapEx story What Wasn't Answered Next Catalysts on the Radar Near-term (Q3 2026): * Prime Day performance data -- the timing shift creates a tough compare but also a recovery setup for Q3 numbers * Project Kuiper satellite launch -- broadband service expected by end of 2026; direct-to-device in 2028. FCC approval for 5,000-satellite network pending Read more * AWS AI chip adoption metrics -- Trainium ramp with Anthropic/OpenAI and whether the $25B run rate holds trajectory Medium-term: * Next earnings: Oct 22, 2026 (tentative) -- EPS consensus $1.93, revenue $203.95B * Power capacity doubling target -- Amazon aims to double capacity by end of 2027 vs. 2025 levels; progress updates will drive data center infrastructure stocks (note Vertiv (VRT) is already up +6.4% today on AI infrastructure tailwinds) * Globalstar acquisition close -- $11.6B deal creates a telecom/satellite moat alongside Kuiper Analyst Reaction Telsey Advisory raised its price target to $335 (from $315), maintaining Outperform -- implying ~24% upside from current levels. The core thesis: AWS backlog of $496B is a multi-year revenue visibility engine that most cloud peers simply cannot match. Read more The Bull/Bear Scorecard The bottom line: AWS is no longer just a cloud business -- it's the world's AI infrastructure backbone, and today's print made that case more convincingly than any previous quarter. This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

US stocks: Amazon beats estimates for quarterly cloud revenue growth

Amazon Web Services cloud revenue surged significantly, surpassing market forecasts. This strong performance was fueled by increased enterprise artificial intelligence spending. Rivals Microsoft and Alphabet's Google also reported solid cloud revenue growth. Amazon's e-commerce business saw increased activity during its Prime Day event. The company's investments in AI infrastructure are now showing clear returns. Amazon.com topped market expectations for quarterly cloud revenue growth on Thursday on the back of surging enterprise AI spending, signaling the company's hefty investments were bearing fruit. Revenue at its cloud computing unit, Amazon Web Services, jumped 37% to $42.2 billion in the second quarter ended June 30, compared with analysts' consensus estimate of a 31.21% increase, according to data compiled by LSEG. US MarketsPowered By As on 31 Jul 2026, 01:19 AM IST S&P 500 Top Gainers EMCOR Group805.95(19.85%) Lam Research300.50(19.08%) Micron Technology872.16(18.02%) Quanta Services658.47(17.35%) Gainers" S&P 500 Top Losers Fair Isaac1,132(-17.55%) C.H. Robinson Worldwide146.03(-15.96%) LKQ22.53(-14.63%) L3Harris Technologies268.32(-9.82%) Losers" Shares of ⁠the ⁠Seattle, Washington-based company were up about 6% in extended trading, having risen about 4% during the session. Amazon said it burned $7.6 billion of cash on a trailing twelve months basis in the second quarter, compared to $18.2 billion in free cash flow a year earlier. The strong showing from the world's No. 1 cloud services provider mirrors solid performances from smaller rivals Microsoft and Alphabet's Google, both of which comfortably beat Wall Street estimates for cloud ⁠revenue. The upbeat results could help quell some concerns over Big Tech's relentless AI investments - set to exceed $700 billion this year - which have strained cash flows at ⁠the traditionally cash-rich companies and sparked worries that they might be overbuilding capacity. Companies, however, have argued that the outlays are crucial to help ease capacity constraints that have prevented them from fully meeting AI-driven demand, pointing to their ballooning contract backlogs. Amazon Web Services has benefited from a growing roster of partnerships this year, including massive cloud infrastructure and chip supply deals with OpenAI, Anthropic, Meta, Pinterest and Snowflake. The company said earlier this year that AWS' annual AI revenue run rate has surpassed $15 billion and was growing in a triple-digit percentage range, looking to reassure investors that its investments were generating clear returns. Analysts have said Amazon will be able to ⁠sustain that level of growth as more data center capacity comes online over the next several months. In its e-commerce business, Amazon has been rolling out faster delivery services globally and expanding to more rural areas of the U.S. to draw more shoppers. The company also held its annual Prime Day event in the quarter, running from June 23 through June 26. The online shopping event featuring steep discounts saw customers snap up electronics, appliances and everyday essentials, with an Adobe Analytics estimate pegging total spending at over $26.4 billion.

Wall Street climbs as Amazon soothes AI jitters

July 31 (Reuters) - Wall Street climbed on Friday, lifted by Amazon as the tech heavyweight's strong quarterly report bolstered investor confidence in AI-related stocks, while Apple dropped after its results disappointed investors. Amazon.com surged 15% after posting its biggest quarterly revenue growth in over four years. Its results, along with a similar report from Microsoft on Wednesday, alleviated investor concerns about potential overspending on AI data centers. Worries that heavy investments in AI infrastructure may be taking too long to pay off rattled global markets this month and led to doubts about companies at the center of Wall Street's rally in recent years. "There were worries that Amazon's spending was just moonshot spending, that it's irresponsible spending, and (CEO) Andy Jassy just put those fears to bed," said Jake Dollarhide, CEO of Longbow Asset Management in Tulsa, Oklahoma. The PHLX chip index added 1.3%, but it remains down over 20% from its June 22 record high close. Apple dropped 9.6% after warning that supply constraints would hurt growth, adding to worries that recent iPhone price hikes would weaken consumer demand. Apple's slump kept the S&P 500 technology index down 0.9%, despite gains in other tech stocks. Microsoft climbed 2.1%. The company on Thursday surged over 15% in its biggest one-day percentage gain since 2008 after it forecast stronger-than-expected cloud growth. Monolithic Power Systems gained 8.5% after forecasting third-quarter revenue above estimates. The S&P 500 was up 0.60% at 7,482.42 points. Even as the S&P 500 climbed, declining stocks outnumbered rising ones by a 1.1-to-one ratio. The Nasdaq gained 0.83% to 25,331.65 points, while the Dow Jones Industrial Average was up 0.54% at 52,492.51 points. SpaceX dipped 3% to $107.82 and was on track for the lowest close since its blockbuster initial public offering in June, when it was priced at $135 a share. Analysts on average expect S&P 500 aggregate second-quarter earnings to soar 48% from a year ago, with AI-related stocks accounting for much of that growth, according to LSEG I/B/E/S. Strong earnings forecasts and a recent decline in share prices have left the S&P 500 trading at about 20 times expected earnings, just above its 10-year average of 19 times, according to LSEG data. The S&P 500 is near flat in July while the Nasdaq has fallen about 3%. Both indexes are up about 9% in 2026. The S&P 500 equal-weighted index was on track for its fourth straight month of gains, thanks to its limited exposure to heavyweight AI-related stocks that have underperformed for much of that time. Three Federal Reserve officials who dissented at the Fed's policy meeting this week in favor of an interest rate hike called on Friday for immediate action to bring inflation down to the U.S. central bank's 2% target. The 2-year U.S. Treasury yield, which typically moves in step with interest rate expectations for the Fed, rose 5.4 basis points to 4.28% but is down slightly for the week. Markets are pricing in a 65% chance of a rate hike at the Fed's September meeting, according to CME FedWatch, down from 82% a week ago but up slightly from 63% on Thursday. Domain registrar GoDaddy lost 19% after narrowing its annual revenue forecast. The S&P 500 posted four new highs and three new lows; the Nasdaq recorded 37 new highs and 101 new lows. (Reporting by Noel Randewich in San Francisco and Johann M Cherian and Ragini Mathur in Bengaluru; Editing by Maju Samuel and Rod Nickel) By Noel Randewich and Johann M Cherian

Amazon AWS Growth, AI Demand Buoy 2Q Results

Anurag Rana, Senior Tech Analyst with Bloomberg Intelligence, breaks down Amazon (AMZN) and Apple (AAPL) earnings from his latest outlook report: Post-2Q Earnings Outlook: Accelerating AI demand and stronger retail execution can keep Amazon.com's underlying momentum intact despite softer 3Q sales guidance, tied partly to the Prime Day shift. The company's 2Q results showed broad-based strength, with Amazon Web Services, retail and advertising all outperforming expectations. Faster delivery and AI-powered shopping are also strengthening customer engagement. We expect Amazon Web Services sales growth to remain at or above 35% in 2H, supported by persistent AI demand and higher backlog. Amazon raised its 2026 cash capital outlay outlook to $220 billion from $200 billion due to higher memory prices.

Amazon beats estimates for quarterly cloud revenue growth

July 30 (Reuters) - Amazon.com topped market expectations for quarterly cloud revenue growth on Thursday on the back of surging enterprise AI spending, signaling the company's hefty investments were bearing fruit. Revenue at its cloud computing unit, Amazon Web Services, jumped 37% to $42.2 billion in the second quarter ended June 30, compared with analysts' consensus estimate of a 31.21% increase, according to data compiled by LSEG. The strong showing from the world's No. 1 cloud services provider mirrors solid performances from smaller rivals Microsoft and Alphabet's Google, both of which comfortably beat Wall Street estimates for cloud revenue. The upbeat results could help quell some concerns over Big Tech's relentless AI investments -- set to exceed $700 billion this year -- which have strained cash flows at the traditionally cash-rich companies and sparked worries that they might be overbuilding capacity. Companies, however, have argued that the outlays are crucial to help ease capacity constraints that have prevented them from fully meeting AI-driven demand, pointing to their ballooning contract backlogs. Amazon Web Services has benefited from a growing roster of partnerships this year, including massive cloud infrastructure and chip supply deals with OpenAI, Anthropic, Meta, Pinterest and Snowflake. The company said earlier this year that AWS' annual AI revenue run rate has surpassed $15 billion and was growing in a triple-digit percentage range, looking to reassure investors that its investments were generating clear returns. Analysts have said Amazon will be able to sustain that level of growth as more data center capacity comes online over the next several months. In its e-commerce business, Amazon has been rolling out faster delivery services globally and expanding to more rural areas of the U.S. to draw more shoppers. The company also held its annual Prime Day event in the quarter, running from June 23 through June 26. The online shopping event featuring steep discounts saw customers snap up electronics, appliances and everyday essentials, with an Adobe Analytics estimate pegging total spending at over $26.4 billion. (Reporting by Deborah Sophia in Bengaluru; Editing by Sriraj Kalluvila)