Amazon’s cloud division posted its fastest quarterly growth in more than four years, with AWS revenue surging 37% year-over-year to $42.2 billion in the second quarter, significantly outpacing Wall Street’s expectations and boosting the company’s stock by over 7% in after-hours trading.
The e-commerce and cloud giant beat on both earnings and revenue in the quarter ended June 30. Amazon reported earnings per share of $5.75, crushing analyst estimates of $1.82—a 215% beat. Total revenue reached $200.6 billion, topping consensus estimates by about $3.6 billion. Operating income jumped 43% year-over-year to $27.5 billion, underscoring the profitability gains flowing from AWS’s accelerating cloud business.
AWS’s 37% growth marked the division’s fastest pace since the fourth quarter of 2021, when it expanded 40%, according to Amazon’s historical earnings reports. The acceleration came as demand for AI infrastructure and cloud services intensified. The company noted that its AI and chips businesses each exceeded $25 billion in annualized revenue run rates, with triple-digit percentage growth year-over-year. These figures demonstrate how rapidly Amazon’s custom silicon and AI service offerings are scaling within the broader cloud platform.
The strong quarter reflected sustained demand from enterprise customers and AI-focused partners. Anthropic, the AI startup in which Amazon has invested up to $25 billion, committed to spending more than $100 billion on AWS infrastructure over the next decade, securing up to 5 gigawatts of new capacity to train and run its models. This partnership has anchored AWS’s AI expansion, with the division’s AI business representing a growing share of overall revenue as customers race to build and deploy large language models and AI agents.
AWS’s acceleration from Q1’s 28% growth to Q2’s 37% reflects the easing of AI chip supply constraints and rising enterprise adoption of cloud-based AI services. The company’s Bedrock platform and custom Trainium and Inferentia chips have become central to its AI strategy, allowing customers to reduce dependence on third-party accelerators while building on AWS infrastructure.
The strong results prompted Amazon to raise its full-year 2026 capital expenditure guidance to $220 billion, up from the $200 billion it had projected earlier. CEO Andy Jassy attributed the $20 billion increase to higher memory chip costs but emphasized that even at the elevated spending level, the company will not have sufficient capacity to meet all the demand it faces this year. This signals that cloud and AI infrastructure investment will remain a strategic priority as Amazon competes with Microsoft and Google for enterprise AI workloads.
The earnings beat comes as the cloud infrastructure market remains intensely competitive. Microsoft and Google have also reported strong cloud growth driven by AI demand, but AWS’s 37% expansion underscores Amazon’s ability to scale its AI and chips operations while maintaining profitability. The company’s AWS operating income rose to $16.6 billion in the quarter from $10.2 billion a year earlier, reflecting both revenue growth and operational leverage.
Sources
- Amazon Investor Relations — official Q2 2026 earnings release and financial results
- Yahoo Finance — AWS revenue, EPS beat, and stock price reaction
- Reuters — capex guidance increase and memory cost drivers
- CNBC — capex raise to $220 billion and earnings call details
- Anthropic — $100 billion AWS commitment and partnership details
- Deadline — Q2 earnings summary and AWS growth context
- Wall Street Journal — capex forecast and AI spending focus
- Washington Post — capex guidance and demand capacity constraints
