Amazon Web Services (AWS) revenue rose 37% year over year to $42.2 billion in the quarter ended June 30, 2026, marking its fastest growth rate in 18 quarters and surpassing analyst estimates of 31.21% growth [1, 2]. AWS’s AI and chip businesses each generated over $25 billion in annualized revenue, demonstrating strong demand for these technologies [1, 2]. CEO Andy Jassy said, "AWS is booming. Our AI and chips businesses each eclipsed run rates of more than US$25 billion. Even at that amount, we will still not have enough capacity to meet all of the demand we have in 2026. I believe this dynamic will also be true in 2027 too." [1]
Amazon’s total revenue increased 20% year over year to $200 billion in Q2, beating consensus estimates of $196.47 billion [3]. Operating income rose 43% to $27.46 billion, ahead of the $23.57 billion consensus, aided by $1.2 billion in lower expenses [3]. AWS contributed nearly 61% of Amazon’s overall operating profit with operating income of $16.62 billion and a margin of 36.8% [2].
GAAP earnings per share surged 242% year over year to $5.75, boosted by a $53.4 billion pre-tax gain related to Amazon’s investment in Anthropic [3]. Capital expenditures jumped sharply as well, with $54.21 billion spent in Q2 alone, a 68% increase from a year earlier and well above expectations [2]. Amazon raised its 2026 capital expenditure forecast by 10% to $220 billion, driven mainly by higher costs for AI memory chips [1, 3].
Amazon expanded its AI infrastructure by beginning to host OpenAI’s models and signed a three-year deal with Meta to supply hundreds of thousands of its Graviton chips to support growing AI workloads [2]. Concerns about AI infrastructure spending and potential AWS market share losses have declined following the strong Q2 results. Dan Morgan, portfolio manager at Synovus Trust, said, "There were concerns about market share losses on AWS, but that’s been put to bed now. It just gives more evidence that AWS’s lead is still intact. The AI tide is rising all boats here." [1]
Amazon’s free cash flow turned sharply negative, burning $7.6 billion over the trailing 12 months compared to positive $18.2 billion a year earlier, reflecting the high capital investments [1]. The company’s growth and spending outlook will remain in focus as it invests to meet accelerating AI demand.
Amazon will report its next earnings results in the coming quarters while continuing to scale AI and chip capacity to meet demand through 2026 and beyond.
