Amazon revenue jumps 20% to $200.6B as AWS growth accelerates

Amazon reported Q2 revenue of $200.6 billion, up 20% year over year and above the $196.46 billion consensus, as AWS growth accelerated to its fastest pace in 18 quarters.

"The results reflect strong demand across cloud and retail, with AWS expanding at its fastest pace in 18 quarters," Chief Executive Officer Andy Jassy said.

AWS revenue rose 36.7% to $42.2 billion, with operating income of $16.6 billion at a 39.4% margin. Net income was $62.6 billion, or $5.75 a share, including a $53.4 billion non-operating gain from the valuation of Amazon's investment in Anthropic. Advertising revenue rose 26% to $19.8 billion, while North America segment revenue grew 16% to $116.2 billion.

Amazon guided Q3 revenue to $197 billion to $202 billion and raised 2026 cash capital expenditure to about $220 billion, up from $200 billion, citing higher memory costs and AI capacity needs. Shares rose more than 20% after the report, with investors weighing whether the AI build-out sustains margin expansion.

AWS backlog tops $496 billion

AWS's remaining performance obligations reached $496 billion, growing at a triple-digit rate as customers commit to multiyear cloud and AI contracts. The unit's annualized revenue run rate hit $169 billion, and both its generative AI and custom-chip businesses each surpassed $25 billion in annualized revenue.

Jassy said AWS could eventually become "a trillion-dollar annual revenue business" as enterprise IT spending shifts to the cloud. He acknowledged near-term free cash flow headwinds until data centers under construction are monetized, and said even at $220 billion of CapEx, Amazon "will still not have enough capacity to meet all the demand we have in 2026."

Retail and advertising momentum

Online stores revenue grew 15% to $70.4 billion, with worldwide paid units up 17%. Amazon said monthly active perishables customers rose 50% since the start of the year, and same-day prescription deliveries at Amazon Pharmacy increased nearly fivefold. The company added OpenAI's GPT-5.6 and Anthropic's Claude Opus 5 to its Bedrock platform, with customers spending more on Bedrock in Q2 than all prior quarters combined.

The guidance raise points to management's expectation that AI demand will accelerate. Investors will watch the Q3 earnings call for updated AWS margins and capacity utilization as the $220 billion build-out comes online.

This article is for informational purposes only and does not constitute investment advice.