Amazon Web Services posts fastest growth in 15 quarters as AI demand fuels cloud sales jump

Amazon's cloud business is surging -- and so is its capital spending | TechCrunch

Amazon was one of several tech giants that on Wednesday beat Wall Street's first-quarter earnings expectations, offering more financial evidence that the AI boom continues to reward companies that supply the picks and shovels. Amazon's cloud business is the latest example. Amazon Web Services, buoyed by its role in fueling the AI boom, saw its net sales increase 28% year-over-year, climbing to $37.6 billion, the company said Wednesday. It was the fastest growth rate for AWS in 15 quarters, Amazon president and CEO Andy Jassy said during the company's earnings call. Jassy attributed AWS' success to its role in providing compute to the AI industry. "It's very unusual for business to grow this fast on a base this large. The last time we saw growth at this clip, AWS was roughly half the size," Jassy said. "We've never seen a technology grow as rapidly as AI. Amazon is already a leader, and companies continue to choose AWS for AI." Jassy compared the business unit's growth to the aughts. "To put our growth in perspective, three years after AWS launched, it had a $58 million revenue run rate. [During] the first three years of this AI wave, AWS's AI revenue run rate is over $15 billion -- nearly 260 times larger." Even as money flows into its cloud business, Amazon is also sinking increasingly large gobs of capital into building out the infrastructure that supports that cloud. Jassy said on Wednesday that capital expenditure growth would continue in the near term. "The faster AWS grows, the more short-term capex we'll spend," he said. "AWS has to lay out cash for land, power, buildings, chips, servers, and networking gear, in advance of when we can monetize it." Jassy positioned these investments as short-term cash burn for a long-term payoff, noting that these capital expenditures fund assets like data centers that last more than 30 years or chips, servers, and networking gear that have a useful life for five to six years. Jassy did attempt to quell investor fears that the e-commerce giant was spending too much on infrastructure. He also provided more than a hint at how that kind of spending would affect free cash flow. "In times of very high growth like now -- where the capex growth meaningfully outpaces the revenue growth -- the early years, free cash flow is challenged," he said. Amazon's first-quarter earnings report reflects the pull on free cash flow. T he company reported that free cash flow decreased to $1.2 billion for the trailing twelve months, driven primarily by a year-over-year increase of $59.3 billion in purchases of property and equipment -- much of its related to AI. That's a 95% drop from the $25.9 billion in free cash flow it had in the first quarter of 2025. "We've been through this cycle with the first big AWS growth wave, and like the results. We expect to feel similarly about this next wave with much larger potential downstream revenue and free cash flow," he added. The e-commerce giant's overall sales, meanwhile, rose 17% to $181.5 billion on a year-over-year basis. Sales grew 12% in North America and 19% throughout the rest of the world, the company reported.

Amazon's chips become a $20B business

Amazon is now among the top three datacenter chip businesses in the world, as its semiconductor business surpassed a $20 billion annual run rate ... and it would be closer to $50 billion if it included itself among the customers, CEO Andy Jassy said during the company's first quarter earnings call on Wednesday. "If our chips business was a standalone business and sold chips produced this year to AWS and other third parties as other leading chip companies do, our annual revenue run rate would be $50 billion," Jassy said. "As best as we can tell, our custom silicon business is now one of the top three datacenter chip businesses in the world." Amazon's rapidly expanding custom silicon business includes its Graviton processors, Trainium AI training chips, and Nitro security chips, and is growing at over 100 percent year over year, Jassy said. "The speed at which we've gotten here is extraordinary, and we have momentum for our custom AI silicon. We've recently shared very large, multi-year, multi-gigawatt training commitments from the two leading AI labs in the world, Anthropic and OpenAI, as well as an increasing number of companies like Uber betting on Trainium," Jassy said. "And we now have over $225 billion in revenue commitments for Trainium." OpenAI committed to consuming roughly two gigawatts of Trainium capacity through AWS to power its frontier models, with the agreement set to ramp in 2027. Anthropic committed to securing up to five gigawatts of current and future Trainium generations to train and run its advanced AI models. Additionally, Meta signed an agreement to deploy tens of millions of AWS Graviton cores for its agentic AI workloads, and Uber partnered with Amazon to use Graviton4 and Trainium3 across its ride and delivery platform. "As AI systems shift from answering questions to taking actions, and as post training and inference scale up, the compute required pulls heavily on CPUs," Jassy said. "That's why Meta chose Graviton, which delivers up to 40 percent better price performance than any other x86 processors and now used by 98 percent of the top 1,000 EC2 customers." But anyone hoping to buy Trainium chips now will have to wait, Jassy said. "Our Trainium2 chip has about 30 percent better price performance than comparable GPUs and has largely sold out," Jassy said. "Trainium3, which just started shipping at the start of 2026 and is 30 to 40 percent more price performant than Trainium2, is nearly fully subscribed, and much of Trainium4, which is still about 18 months from broad availability, has already been reserved." Overall, Amazon reported first-quarter revenue of $181.5 billion, up 17 percent year over year. Its cloud unit, AWS, generated $37.6 billion in revenue during the quarter, a 28 percent jump that marked its fastest growth rate in 15 quarters. Jassy said in the first three years after AWS launched, it had a $58 million revenue run rate, while in the first three years of this AI wave, AWS' AI revenue run rate is over $15 billion - nearly 260 times larger. Amazon's overall net income for the quarter came in at $30.3 billion, or $2.78 per diluted share. That's up from $17.1 billion, or $1.59 per diluted share, in Q1 2025, but that number includes $16.8 billion in pre-tax gains from Amazon's investments in Anthropic, booked as non-operating income. Amazon Bedrock, the company's managed service for accessing foundation models, processed more tokens in the first quarter than in all prior years combined, with customer spending on the platform growing 170 percent quarter over quarter, the company said. Amazon made OpenAI's GPT-5.4 model available in limited preview on Bedrock and announced that GPT-5.5 is coming soon. It also launched Anthropic's Claude Opus 4.7 on the platform. The cloud giant also announced a collaboration with Cerebras to deliver what it described as the fastest AI inference speeds available for large language models through Bedrock, making AWS the only cloud provider to offer such a solution, it said. The company also launched Bedrock AgentCore, a set of infrastructure tools for building and deploying AI agents, which Amazon said is now used to deploy an agent as frequently as every 10 seconds. ®

Amazon Reports Biggest Cloud Sales Jump Since 2022 on AI Demand

Amazon.com Inc.'s cloud unit posted its fastest quarterly growth in more than three years, bolstered by new data center capacity and an increasing slice of business from Anthropic and OpenAI. Still, capital spending for that effort jumped to $44.2 billion in the first quarter, exceeded analysts' expectations, a sign that Amazon is seeing higher expenses for the build-out than anticipated. Sales by Amazon Web Services, which accounts for about a fifth of Amazon's revenue and most of its operating profit, were $37.6 billion during the first three months of 2026, up 28% from the prior year. That's the fastest growth rate since the second quarter of 2022. Amazon in recent months has invested in the two leading AI startups -- OpenAI and Anthropic PBC -- in deals that committed the labs to spend more than $100 billion on AWS services in the coming years. Those tie-ups have helped assuage investor concerns about slowing AWS growth and Amazon's lack of a hit consumer AI product on par with OpenAI's ChatGPT, Anthropic's Claude or Alphabet Inc.'s Gemini. Amazon Chief Executive Officer Andy Jassy has said that the company aims to spend about $200 billion this year -- a 56% increase from 2025 -- mostly on data centers, including those customized for AI services. The shares were little changed in extended trading after closing at $263.04 in New York. The stock has gained 14% this year. Overall, first-quarter revenue increased 17% to $181.5 billion, the Seattle-based company said Wednesday in a statementBloomberg Terminal. Analysts, on average, estimated $177.2 billion, according to data compiled by Bloomberg.

Amazon beats quarterly cloud growth estimates on strong AI demand

April 29 (Reuters) - Amazon.com (AMZN.O), opens new tab topped Wall Street estimates for quarterly cloud revenue growth on Wednesday, driven by strong enterprise spending on its cloud computing services as companies step up artificial intelligence adoption. Revenue at Amazon Web Services (AWS) jumped 28% to $37.6 billion in the first quarter ended March, compared with analysts' average estimate of a 25.08% increase to $36.61 billion, according to data compiled by LSEG. Shares of the company, however, dipped 2% in volatile extended trading after it projected current-quarter operating income between $20 billion and $24 billion, slightly lower than estimates of $22.62 billion at midpoint. The upbeat cloud revenue comes when Amazon - the world's largest cloud services provider - ⁠has already boosted investor confidence by deepening its partnership with the two biggest AI firms, OpenAI and Anthropic, within days of each other. On Tuesday, Amazon made available all of OpenAI's latest models and its coding agent, Codex, on AWS, taking advantage of loosened ties between the ChatGPT maker and cloud rival Microsoft (MSFT.O), opens new tab. Last week, Amazon stuck a deal to invest up to $25 billion in Anthropic, while the Claude creator committed to spending more than $100 billion on AWS in the next 10 years. The announcements, coupled with a disclosure earlier this month that AI services at AWS were generating more than $15 billion in annualized revenue, have helped push ⁠Amazon's stock up some 14% so far this year, putting it among the best performers in the "Magnificent 7" group of tech mega-caps. Amazon, which has set a target of around $200 billion in capital spending this year, has been going all out to reassure investors that its spending on AI infrastructure will generate returns in the near ⁠term. CEO Andy Jassy said in his shareholder letter this month that much of the company's 2026 spending will be monetized over 2027 and 2028. Still, the roughly $600 billion that Big Tech is expected to pour into AI this ⁠year - a historic outlay that has dented cash flows at these companies - is testing investors' patience, even as companies say that it is necessary to increase computing capacity as strong AI demand outstrips supply. At ⁠its retail business, Amazon has been investing in expanding same-day delivery to more towns and small cities, and has sharpened focus on grocery delivery in a bid to better compete with supermarket chains such as Walmart and Kroger (KR.N), opens new tab. Reporting by Deborah Sophia in Bengaluru; Editing by Sriraj Kalluvila Our Standards: The Thomson Reuters Trust Principles., opens new tab

Andy Jassy says Amazon investors will be rewarded by all its AI spending

He argued investors are overlooking how Amazon invests ahead of demand, noting profits and cash flow typically follow once infrastructure is fully utilized. Andy Jassy said Amazon's massive spending on artificial intelligence isn't something investors should fear -- it's exactly why they'll be rewarded over time. "We believe that AI is the biggest technology transformation in our lifetimes," the CEO said on "Mad Money." "It's going to reinvent every single customer experience we know and altogether new ones we never imagined." In February, Amazon announced plans to invest $200 billion this year in capital expenditures, largely tied to AI infrastructure. The disclosure alongside fourth-quarter earnings sent sent shares tumbling. It took roughly two months for the stock to erase all of its post-earnings declines in early April. It has kept climbing higher since then, setting a new record close Monday. The crux of the debate surrounding the stock: Will Amazon be able to generate meaningful returns from all this spending? Skeptics also note that Amazon is projected to have negative free cash flow in 2026, according to FactSet. Jassy argues that scale of spending reflects just how big the opportunity is. He pointed to the sheer pace of growth of its cloud unit, Amazon Web Services, as evidence that the company is investing in the right place. "After the first three years of this incarnation of AI, our run rate is over $15 billion -- 260 times what it was the first three years of AWS," he said. AWS is expected to generate total revenue of roughly $166 billion this year, according to FactSet. "When you have shifts that are this momentous ... you want to bet big," added Jassy, who used to lead Amazon's cloud unit before replacing Jeff Bezos as companywide CEO in 2021. Jassy specifically pushed back on the cash flow concerns, saying critics misunderstand how Amazon makes money from these investments. "We have to lay out capital and cash in advance of when we can monetize it," he said, explaining that investments in data centers and infrastructure are made years before they generate revenue. Those assets, however, have multiyear long lifespans, Jassy said, allowing Amazon to generate returns over an extended period. "When your revenue growth starts to catch up with the capital expenditure growth, you actually end up really liking the operating margin, the free cash flow, and the [return on invested capital],'' Jassy said. "We've lived this movie once before in the first wave of AWS ... and I think the same story is going to play out, except with much larger revenue and free cash flow downstream."

Amazon's cloud unit reports 28% sales growth, topping estimates

Amazon Web Services CEO Matt Garman speaks at the AWS re:Invent conference in Las Vegas on Dec. 3, 2025. Amazon Web Services recorded 28% revenue growth in the first quarter, beating analysts' estimates, as the cloud infrastructure leader boosted its investment in Anthropic and prepared to work more closely with OpenAI. Revenue at AWS rose to $37.59 billion in the period from $29.27 billion a year earlier, Amazon said in its earnings release on Wednesday. Analysts polled by StreetAccount had expected $36.64 billion. The unit accounted for almost 21% of its parent's overall revenue. While AWS remains atop the cloud infrastructure market, it's facing increased competition from Microsoft Azure and Google's cloud division, which are also partnering with the big artificial intelligence labs and offering more models and services. Microsoft said on Wednesday that revenue from Azure and other cloud services jumped 40%, while Alphabet said revenue from Google Cloud, which includes infrastructure and corporate productivity apps, went up some 63%. AWS represents a critical source of earnings for Amazon. The segment's operating income increased about 23% to $14.16 billion, well above StreetAccount's $12.84 billion consensus. OpenAI said during the quarter that it would expand an existing $38 billion AWS commitment by $100 billion over eight years, with Amazon planning to invest $50 billion in OpenAI. Earlier this month, Amazon agreed to invest up to $25 billion in Anthropic, on top of the $8 billion that it has poured into the AI startup in recent years, as part of an expanded agreement to build out AI infrastructure. AWS' position in AI strengthened further this week. On Monday, OpenAI said Microsoft will lose its status as sole cloud provider for certain computing jobs, followed by an announcement the next day that AWS would make OpenAI models available in the Amazon Bedrock cloud service for building AI agents and applications. Also during the quarter, AWS said it would bring out cloud services based on low-latency silicon from AI chipmaker Cerebras, which is looking to go public.

'It's very unusual for business to grow this fast': Even Amazon CEO Andy Jassy is surprised at AWS cloud success -- and AI domination is next

* AWS revenue grew 28% - it's now a fifth of Amazon's total revenue * Industry partnerships and in-house chips are impressing customers * Capex will remain high during the "early years" of the AI boom Amazon revenues are up 17% year-over-year to $181.5 billion, largely driven by a 28% year-over-year growth in AWS revenue to $37.6 billion, with the cloud business now accounting for around one-fifth of the company's entire income. In fact, this is the fastest growth rate in 15 quarters (nearly four years), and AWS' significant upward momentum was largely driven by continued enterprise spend on AI, with the business' AI services already at around $15 billion in annual revenue run rate. Ongoing partnerships with the likes of Anthropic and OpenAI, including yesterday's announcement of an expanded partnership with OpenAI, only serve to strengthen AWS' position in the cloud market. AWS revenues continue to skyrocket Despite a consistently high income, Amazon still plans to spend plenty of cash. Q1 capex hit as much as $44 billion, with the company planning around $200 billion throughout fiscal 2026 as it continues to invest in AI data centers. "It's very unusual for business to grow this fast on a base this large," CEO Andy Jassy said on the earnings call. "The last time we saw growth at this clip, AWS was roughly half the size." Compared with three years after AWS launched, when it had a $58 million revenue run rate, the business is now around 260x larger. He described it as a once-in-a-lifetime opportunity to support long-term revenue, with this heavy upfront investment likely to pay off in the long run. A continued push to develop in-house chips is also designed to cut costs by reducing the reliance on Nvidia. "The faster AWS grows, the more short-term capex we'll spend," Jassy added, acknowledging that "free cash flow is challenged" in the "early years" and during times of high growth. Looking ahead, the company predicts a further 16-19% increase in total revenue next quarter, though quite how much AWS will grow is yet to be seen. Follow TechRadar on Google News and add us as a preferred source to get our expert news, reviews, and opinion in your feeds.

Amazon Beats Quarterly Cloud Growth Estimates

April 29 (Reuters) - Amazon.com topped Wall Street estimates for ⁠quarterly ⁠cloud revenue growth on Wednesday, ⁠driven by strong enterprise spending on its cloud computing services as companies step up artificial intelligence adoption. Revenue at Amazon Web Services (AWS) jumped 28% to $37.6 billion in the first quarter ended March, compared with analysts' average estimate of a 25.08% increase to $36.61 billion, according to data compiled by LSEG. The ⁠upbeat revenue ⁠comes when Amazon - the world's largest cloud services provider - has already boosted investor confidence by deepening its partnership with the two biggest AI firms, OpenAI and Anthropic, within days of each other. On Tuesday, Amazon made available all of OpenAI's latest models and its coding agent, Codex, on AWS, taking advantage of loosened ties between the ChatGPT maker and cloud ⁠rival ⁠Microsoft. Last week, Amazon stuck a ⁠deal to invest up to $25 billion in Anthropic, while the Claude creator committed to spending more than $100 billion on AWS in the ⁠next 10 years. The announcements, coupled with a disclosure earlier this month that AI services at AWS were generating more than $15 billion in annualized revenue, have helped push Amazon's stock up some 14% so far this year, putting it among the best performers in the "Magnificent 7" group ⁠of tech mega-caps. Amazon, which has set a target of around $200 billion in capital ⁠spending this year, has been going all out to reassure investors that its spending on AI infrastructure will generate returns in the near term. CEO Andy Jassy said in his shareholder letter this month that much of the company's 2026 spending will be monetized over 2027 and 2028. Still, the roughly $600 billion that Big Tech is expected to pour into AI this year - a historic outlay that has dented cash flows at these companies - is testing investors' patience, even as companies say that ⁠it is necessary to increase computing capacity as strong AI demand outstrips supply. At its retail business, Amazon has been investing in expanding same-day delivery to more towns and small cities, and has sharpened focus on grocery delivery in a bid to better compete with supermarket chains such as Walmart and Kroger. (Reporting by Deborah Sophia in Bengaluru; Editing by Sriraj Kalluvila)

Amazon beats quarterly cloud growth estimates on strong AI demand; AWS revenue jumps 28%

Amazon Web Services (AWS) surpassed Wall Street's cloud revenue expectations, driven by increased enterprise spending on AI adoption. Despite strong cloud performance and significant AI partnerships, the company's stock dipped after projecting current-quarter operating income below estimates. Amazon is investing heavily in AI infrastructure, aiming to monetize these expenditures in the coming years. Amazon.com topped Wall Street estimates for quarterly cloud revenue growth on Wednesday, driven by strong enterprise spending on its cloud computing services as companies step up artificial intelligence adoption. Revenue at Amazon Web Services (AWS) jumped 28% to $37.6 billion in the first quarter ended March, compared with analysts' average estimate of a 25.08% increase to $36.61 billion, according to data compiled by LSEG. Shares of the company, however, ⁠dipped ⁠2% in volatile extended trading after it projected current-quarter operating income between $20 billion and $24 billion, slightly lower than estimates of $22.62 billion at midpoint. The upbeat cloud revenue comes when Amazon - the world's largest cloud services provider - has already boosted investor confidence by deepening its partnership with the two biggest AI firms, OpenAI and Anthropic, within days of each other. On Tuesday, Amazon made available all of OpenAI's latest models and its coding agent, Codex, on AWS, taking ⁠advantage of loosened ties between the ChatGPT maker and cloud rival Microsoft. Last week, Amazon stuck a deal to invest up to $25 billion in Anthropic, while the Claude creator ⁠committed to spending more than $100 billion on AWS in the next 10 years. The announcements, coupled with a disclosure earlier this month that AI services at AWS were generating more than $15 billion in annualized revenue, have helped push Amazon's stock up some 14% so far this year, putting it among the best performers in the "Magnificent 7" group of tech mega-caps. Amazon, which has set a target of around $200 billion in capital spending this year, has been going all out to reassure investors that its spending on AI infrastructure will generate returns in the near term. CEO Andy Jassy said in his shareholder letter this month that much of the company's 2026 spending will ⁠be monetized over 2027 and 2028. Still, the roughly $600 billion that Big Tech is expected to pour into AI this year - a historic outlay that has dented cash flows at these companies - is testing investors' patience, even as companies say that it is necessary to increase computing capacity as strong AI demand outstrips supply. At its retail business, Amazon has been investing in expanding same-day delivery to more towns and small cities, and has sharpened focus on grocery delivery in a bid to better compete with supermarket chains such as Walmart and Kroger.

Amazon CEO Andy Jassy Defends $200 Billion AI Spending Blitz, Says It Will Drive Long-Term Investor Rewar

Amazon's AI Investment Strategy Raises Stakes Amazon plans to spend roughly $200 billion in capital expenditures this year, with much of that funding directed toward AI infrastructure, including data centers, chips and cloud expansion. The announcement initially rattled investors after its February earnings report, triggering a sell-off over concerns about near-term profitability and weakening free cash flow. Critics have questioned whether such heavy spending can generate sufficient returns, particularly as analysts project possible negative free cash flow in 2026. AMZN shares have surged 29.69% over the past month and are up 9.12% over the last six months, climbing to $272.05, according to Benzinga Pro. Jassy Compares AI Push To AWS Success Story While speaking on CNBC's "Mad Money," Jassy argued that Amazon has successfully navigated this kind of large-scale investment cycle before through Amazon Web Services. He said AI represents the "biggest technology transformation" of modern times. He noted that Amazon's current AI business has already reached a run rate exceeding $15 billion in just three years -- dramatically faster than AWS's early growth trajectory. Jassy highlighted that Amazon must invest heavily "in advance" before monetization fully materializes, pointing to the long-term lifespan of infrastructure assets and their future earnings power. Why Amazon Believes Big Spending Will Pay Off According to Jassy, once revenue growth catches up to capital spending, Amazon could see stronger operating margins, improved free cash flow and higher returns on invested capital. His broader message to shareholders is clear: major technological shifts require companies to "bet big" early, even if short-term financial metrics appear pressured. Amazon Q1 Earnings Beat, Q2 Outlook Strong In April, Amazon posted first-quarter revenue of $181.52 billion, surpassing analyst expectations of $177.30 billion, while quarterly earnings came in at $2.78 per share, well above estimates of $1.66. Revenue rose 17% from a year earlier, and Amazon projected second-quarter sales of $194 billion to $199 billion, ahead of Wall Street forecasts of $188.87 billion. The operating income is expected to be between $20 billion and $24 billion, versus $19.2 billion in the same period last year. Price Action: AMZN rose 1.35% Monday to close at $272.05. The shares slipped 0.026% in after-hours trading. According to Benzinga Edge, AMZN scores in the 96th percentile for Growth, highlighting a strong trend across short, medium and long-term performance indicators. Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors. Photo courtesy: Shutterstock Market News and Data brought to you by Benzinga APIs To add Benzinga News as your preferred source on Google, click here.

AWS Says AI Is Driving New Wave Of Cloud Spending -- And Growth Is Accelerating

Amazon's cloud computing business is experiencing its fastest growth in nearly four years, driven by surging demand for AI solutions, enterprise cloud adoption, and new innovations like Bedrock and Kiro. Amazon President and CEO Andy Jassy discussed fiscal first quarter 2026 fast-growing AI revenue, Trainium and Graviton chip advances, and increasing customer preference for AWS' secure, scalable, and diverse agent offerings. Amazon Web Services is growing at its fastest rate in 15 quarters, and Amazon President and CEO Andy Jassy said he sees no end in sight to that fast growth. Jassy, in his prepared remarks during Amazon's first fiscal quarter 2026 financial conference call Wednesday, told financial analysts that Amazon Web Services is now a $150 billion annualized revenue run rate business. "It's very unusual for a business to grow this fast on a base this large," he said. "For the last time we saw growth at this clip, AWS was roughly half the size." [Related: AWS Wins $581M Cloud Deal From U.S. Air Force's Cloud One Program] Jassy also said he has never seen a technology grow as rapidly as AI has. "Amazon is already a leader, and companies continue to choose AWS for AI," he said. "To put our growth in perspective, three years after AWS launched, it had a $58 million revenue run rate. The first three years of this AI wave, AWS AI revenue run rate is over $15 billion, nearly 260 times larger." Customers are choosing AWS for AI for multiple reasons, Jassy said. First is AWS' broader capabilities than those of its competitors, including model building with SageMaker to reduce training time by up to 40 percent and high-performance inference using Amazon Bedrock's selection of frontier models. "We're excited to make OpenAI's models available in Bedrock," he said. "Yesterday we added OpenAI's GPT-5.4 model, with 5.5 coming soon. Yesterday, we also started the preview of Amazon Bedrock managed agents powered by OpenAI, the stateful runtime environment that enables any organization to build generative AI applications and agents at production scale. We believe that modern agentic applications will be stateful and this new technology will rapidly accelerate agentic AI adoption. OpenAI has said they're already seeing unprecedented demand for this new product, and we're seeing heavy customer interest as well." Most of the value companies derive from AI will be through agents, and AWS customers are building agents using AWS' Strands Agents with their proprietary data, Jassy said. Customers have downloaded Strands more than 25 million times, and in the first fiscal quarter it was downloaded three times more than the prior quarter, he said. Customers can deploy agents with enterprise scale, security, and reliability using Bedrock AgentCore, which Jassy said is being used to deploy an agent as frequently as every 10 seconds. "We also offer turnkey agents for coding, software migrations, business operations, and knowledge workers in Kiro, Transform, Connect, and Quick, and they continue to resonate with customers," he said. "The number of developers using Kiro more than doubled quarter-over-quarter, and enterprise customer usage increased nearly 10x. Customers have used Transform to save over 1.56 million hours of manual effort when migrating and modernizing their workloads. The number of new customers using Quick has grown more than four times quarter-over-quarter, and we just announced V1 of our Quick desktop app yesterday. It's very compelling as it can query your email, calendar, Slack, local files, and several other applications you use every day to flag important communications, retrieve and summarize information, make recommendations, compose and send communications to others, and create agents that highlight or automatically do work that you used to have to do yourself." Another reason enterprise customers choose AWS is that, as they expand their use of AI, they want their inference to reside near their other applications and data, and much more of it resides in AWS than anywhere else, Jassy said. "As customers expand their AI usage, they also want to consume additional non-AI services, and they're choosing AWS because we built the broadest and most capable core offerings by a wide margin," he said. "We offer thousands of features across compute, storage, databases, analytics, security and more. ... [And] AWS has the strongest security and operational performance of any AI and infrastructure provider." AWS' chips business continues to grow rapidly and is larger than what a lot of folks realize, Jassy said. The business saw nearly 40 percent quarter-over-quarter growth in the first quarter and now has an annual revenue run of over $20 billion with triple-digit growth rates year-over-year. "If our chips business was a standalone business that sold chips produced this year to AWS and other third parties as other leading chip companies do, our annual revenue run rate would be $50 billion," he said. "As best as we can tell, our custom silicon business is now one of the top three data center chip businesses in the world. The speed at which we've gotten here is extraordinary, and we have momentum for our custom AI silicon." AWS already has very large, multi-year, multi-gigawatt Trainium commitments from Anthropic and OpenAI, as well as an increasing number of companies like Uber betting on Trainium, Jassy said. "We now have over $225 billion in revenue commitments for Trainium," he said. "Our Trainium2 chip has about 30 percent better price performance than comparable GPUs. It is largely sold out. Trainium3, which just started shipping at the start of 2026 and has 30 [percent] to 40 percent more price performance than Trainium2, is nearly fully subscribed. And much of Trainium4, which is still about 18 months from broad availability, has already been reserved." Jassy said AWS recently announced that Meta is committed to using tens of millions of its AWS Graviton CPU chips to run the CPU intensive workloads behind agentic AI with the performance and efficiency needed at their scale. "AI is commonly seen as a GPU story, but the rise of agentic workloads -- real-time reasoning, code generation, reinforcement learning, and multi-step task orchestration -- is driving massive CPU demand as well," he said. "As AI systems shift from answering questions to taking actions, and as post-training and inference scale up, the compute required pulls heavily on CPUs. That's why Meta chose Graviton, which delivers up to 40 percent better price performance than any other x86 processors and is now used by 98 percent of the top 1,000 EC2 customers." Jassy said Amazon continues to be confident in the long-term CapEx investments it is making. "Of the AWS CapEx we intend to spend in 2026, much of which will be installed in future years," he said. "We have high confidence this will be monetized well, as we already have customer commitments for a substantial portion of it, and that it will yield compelling operating margins and ROIC (return on invested capital). As we've been sharing, the faster AWS grows, the more short-term CapEx we'll spend. AWS has to lay out cash for land, power, buildings, chips, servers, and networking gear in advance of when we can monetize it, typically six to 24 months before we start billing customers, depending on the component. However, these CapEx investments fund assets with many-year useful lives: 30-plus years for data centers, five to six years for chips, servers, and networking gear." During the question-and-answer segment of the conference call, when asked about the kind of investment AWS will need to make going forward for its chip business, Jassy said it would be a "significant" expense. "We do view this as truly a once-in-a-lifetime opportunity where every application that we know is going to be reinvented, and there are so many new applications that none of us have ever imagined or dreamed we could build that are starting to be built and will be built," he said. "And all that is going to be built on top of AI with a lot of consumption of CPUs and core as well. So I expect that we will invest a significant amount of capital over the coming years to pursue that opportunity." When asked by another analyst about AWS' backlog, Jassy said the backlog for the first quarter is $364 billion, not including the recent deal AWS announced with Anthropic for over $100 billion. Amazon By The Numbers For its first fiscal quarter 2026, which ended March 31, Amazon reported total revenue of $181.5 billion, up 15 percent over the $155.7 billion the company reported for its first fiscal quarter 2025. That included North America revenue of $104.1 billion, up 12 percent; international revenue of $$39.8 billion, up 19 percent; and AWS revenue of $37.6 billion, up 28 percent. The company also reported GAAP net income of $30.3 billion or $2.78 per share, up significantly from last year's $17.1 billion or $1.59 per share. Looking ahead, Amazon expects second fiscal quarter revenue of between $194 billion and $199.0 billion, up year-over-year by 16 percent and 19 percent.

Amazon beats quarterly cloud growth estimates on strong AI demand; AWS revenue jumps 28%

Amazon.com topped Wall Street estimates for quarterly cloud revenue growth on Wednesday, driven by strong enterprise spending on its cloud computing services as companies step up artificial intelligence adoption. Revenue at Amazon Web Services (AWS) jumped 28% to $37.6 billion in the first quarter ended March, compared with analysts' average estimate of a 25.08% increase to $36.61 billion, according to data compiled by LSEG. Shares of the company, however, ⁠dipped ⁠2% in volatile extended trading after it projected current-quarter operating income between $20 billion and $24 billion, slightly lower than estimates of $22.62 billion at midpoint. The upbeat cloud revenue comes when Amazon - the world's largest cloud services provider - has already boosted investor confidence by deepening its partnership with the two biggest AI firms, OpenAI and Anthropic, within days of each other. On Tuesday, Amazon made available all of OpenAI's latest models and its coding agent, Codex, on AWS, taking ⁠advantage of loosened ties between the ChatGPT maker and cloud rival Microsoft. Last week, Amazon stuck a deal to invest up to $25 billion in Anthropic, while the Claude creator ⁠committed to spending more than $100 billion on AWS in the next 10 years. The announcements, coupled with a disclosure earlier this month that AI services at AWS were generating more than $15 billion in annualized revenue, have helped push Amazon's stock up some 14% so far this year, putting it among the best performers in the "Magnificent 7" group of tech mega-caps. Amazon, which has set a target of around $200 billion in capital spending this year, has been going all out to reassure investors that its spending on AI infrastructure will generate returns in the near term. CEO Andy Jassy said in his shareholder letter this month that much of the company's 2026 spending will ⁠be monetized over 2027 and 2028. Still, the roughly $600 billion that Big Tech is expected to pour into AI this year - a historic outlay that has dented cash flows at these companies - is testing investors' patience, even as companies say that it is necessary to increase computing capacity as strong AI demand outstrips supply. At its retail business, Amazon has been investing in expanding same-day delivery to more towns and small cities, and has sharpened focus on grocery delivery in a bid to better compete with supermarket chains such as Walmart and Kroger.

Amazon tops cloud expectations on strong AI demand, shares rise

April 29 (Reuters) - Amazon.com on Wednesday reported cloud sales growth above Wall Street expectations, driven by strong enterprise spending as companies continue to devote tremendous resources to their artificial intelligence efforts. CEO Andy Jassy said the company was maintaining its target for $200 billion in AI investment this year, a relief to investors who have seen Big Tech relentlessly hike capital spending forecasts into the hundreds of billions in the rush to build out data-center capacity needed for AI workloads. Shares rose nearly 4% in volatile after-hours action. Revenue at Amazon Web Services (AWS) jumped 28% to $37.6 billion in the first quarter, beating analysts' average estimate for a 25% increase, according to LSEG. Net sales overall grew to $181.5 billion. The Seattle company, the world's largest cloud services provider, has lately boosted investor confidence by deepening its partnership with the two biggest AI firms, OpenAI and Anthropic, within days of each other. The stock is up some 14% so far this year, among the best performers in the "Magnificent 7" group of tech mega-caps, as the firm works overtime to reassure investors that its AI spending will generate returns in the near term. Jassy struck an upbeat tone overall, praising cloud computing and chip deals as well as plans to expand the company's nascent satellite internet network. Those developments mean "that we're really unusually well positioned for the inflection that we're seeing and the type of growth that we're experiencing," he said. "The significant reacceleration in AWS sales growth is the standout story," said Jesse Cohen, senior analyst at Investing.com, adding that Amazon customers "are fully embracing new workloads, especially in AI." Rival Alphabet's shares were up 7% in post-market action, after it said its Google Cloud division's sales grew 63% to $20 billion in the first quarter, exceeding estimates for a 50% rise. Gil Luria, a D.A. Davidson analyst, noted that for AWS, "the much better growth rate at Google Cloud may be a slight disappointment." The roughly $600 billion that Big Tech is expected to pour into AI this year - a historic outlay that has dented their cash flows - is testing investors' patience, even as companies say that it is necessary to increase computing capacity as strong AI demand outstrips supply. For the period ended March 31, Amazon's capital expenditures were $44.2 billion, up more than 76% from the year-earlier period, and above analysts' estimate of $41.40 billion. In February, Amazon projected about $200 billion in such spending for the year, an initial shock to investors. Jassy said in his shareholder letter this month that much of the company's 2026 spending will be monetized over 2027 and 2028. Amazon projected current-quarter operating income between $20 billion and $24 billion, a slightly wider downside range from the current midpoint estimate of $22.62 billion. BIG CLOUD PARTNERSHIPS On Tuesday, Amazon made available all of OpenAI's latest models and its coding agent, Codex, on AWS, taking advantage of loosened ties between the ChatGPT maker and cloud rival Microsoft. Last week, Amazon struck a deal to invest up to $25 billion in Anthropic, while the Claude creator committed to spending more than $100 billion on AWS in the next 10 years. The company earlier this month said AI services at AWS were generating more than $15 billion in annualized revenue. Amazon forecast current-quarter revenue between $194 billion and $199 billion, compared with the analysts' average estimate of $188.9 billion, according to LSEG. That factors in a slight negative effect from unfavorable foreign exchange rates. At its retail business, Amazon has been investing in expanding same-day delivery to more towns and small cities, and has sharpened its focus on grocery delivery to better compete with supermarket chains such as Walmart and Kroger. Ad sales, an area of huge growth for Amazon, jumped 24% year-over-year to $17.2 billion. The company has been putting ads just about anywhere it can, including in grocery shopping carts and Prime Video content. Amazon has been trimming corporate jobs, including 16,000 in January, across a broad swath of roles. However, its total workforce was down only 1,000 from the end of last year. (Reporting by Deborah Sophia in Bengaluru; Editing by Sriraj Kalluvila and David Gaffen)