Amazon Web Services Growth Soothes AI Spending Fears With 37% Revenue Jump
34 Sources
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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
[2]
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
[3]
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
[4]
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
[5]
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,
[6]
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
[7]
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
[8]
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
[9]
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
[10]
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
[11]
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
[12]
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,
[13]
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%
[14]
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
[15]
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
[16]
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
[17]
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
[18]
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
[19]
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
[20]
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
[21]
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
[22]
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
[23]
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
[24]
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
[25]
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
[26]
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
[27]
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
[28]
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
[29]
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
[30]
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
[31]
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
[32]
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
[33]
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
[34]
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
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Amazon Web Services posted 37% cloud revenue growth to $42.2 billion in Q2, its strongest performance since 2021. Despite negative free cash flow and a raised capital expenditure forecast to $220 billion, investors rewarded the company with a 12% stock surge as AWS growth demonstrated that massive AI infrastructure investments are converting into tangible returns.
Amazon Web Services Delivers Strongest Growth Since 2021
Amazon Web Services achieved 37% cloud revenue growth in the second quarter, reaching $42.2 billion and establishing a $169 billion annualized run rate
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. This marked the fastest AWS growth pace since the end of 2021, handily beating analysts' consensus estimate of a 31.21% increase2
. Operating income in the cloud division surged 64% to $16.6 billion, lifting AWS operating margin to 39.4% from 32.9% a year ago4
. Amazon's second-quarter earnings showed net sales rising 20%, with overall operating income of $27.5 billion, up 43%4
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Source: BNN
Investor Reaction Rewards AI-Driven Demand Despite Cash Flow Concerns
Amazon shares jumped more than 12% before the bell, putting the company on track to add approximately $300 billion in market value
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. Investors looked past the company's negative free cash flow and increased capital expenditure forecast, focusing instead on booming demand that validated enterprise AI spending. The investor reaction stood in sharp contrast to Alphabet's earnings last week, when shares stumbled after reporting its first negative cash flow2
. At least five brokerages raised their price targets on Amazon following the results, with J.P. Morgan noting encouragement from the strength in core AWS business, which has high correlation with AI revenue2
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Source: Benzinga
Capital Expenditure Surge and Free Cash Flow Turn Negative
Amazon spent $173 billion on property and equipment for the fiscal year ended June 30, up from $107.65 billion the year before, and raised its 2026 capex forecast from $200 billion to $220 billion
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. The company's free cash flow swung sharply negative, 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 earlier2
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. 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 year1
. Amazon's operations generated $161.4 billion over the past 12 months, but the company spent a net $169 billion on property and equipment, leaving the shortfall4
.Andy Jassy Explains Long-Term Financial Returns Framework
Andy Jassy provided detailed economics that soothed investor concerns about AI infrastructure investments during the earnings call
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. He explained that data centers have 30-plus-year useful lives, while servers and networking equipment operate on shorter cycles with breakeven points in under three years. Most AI capacity is being contracted for at least five-year terms, meaning Amazon drives significant free cash flow in the two to three years after breaking even3
. Jassy emphasized that Amazon has clear line-of-sight to strong financial returns at current spending levels and higher, noting that demand remained so strong that computing capacity proved insufficient despite raising capital spending2
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Source: CRN
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AI Monetization Through Chips and Platform Strategy
Amazon Web Services benefits extend beyond data centers through serious long-term bets on chips like the Trainium TPU and Arm-based Graviton processor, which can meaningfully improve margins
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. CEO Andy Jassy stated that AWS' AI and chips businesses each eclipsed run rates of more than $25 billion, with the chips business growing from a $20 billion run rate three months ago4
. Jassy emphasized that AWS and Amazon Bedrock can have wildly successful business without its own frontier model, as there won't be a single model to rule them all1
. Amazon Web Services has benefited from growing partnerships this year, including massive cloud infrastructure and chip supply deals with OpenAI, Anthropic, Meta, Pinterest and Snowflake5
.Market Differentiates Cloud Hosts From AI Labs
Investors are treating cloud hosts as the most reliable part of the AI stack while remaining skeptical about underlying economics for AI labs and startups
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. Companies like Meta, which have significant capex and no clear revenue source, experienced intense skepticism, with Meta's stock falling 8% after earnings as investors focused on its cash flow crunch and continued spending1
. Jake Behan, head of capital markets at Direxion, noted that the market is becoming increasingly idiosyncratic, rewarding companies that can successfully monetize AI investments while penalizing those with longer-duration paths to generating returns2
. However, Amazon's hosting revenue is someone else's AI bill, and if spending isn't sustainable for big labs and their clients, revenue won't be stable for cloud hosts either1
.References
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