Amazon Q2 2026 Earnings: AWS Up 37%, Revenue Tops $200B

Amazon closed out megacap earnings week with the print the market had been waiting for. After the bell on Thursday, July 30, 2026, the company reported second-quarter results that beat on every headline line, crossed $200 billion in quarterly revenue for the first time in its history, and — most importantly for a season that has been grading cloud growth above all else — showed Amazon Web Services accelerating to its fastest rate in five years. The stock jumped as much as 10% in extended trading before settling up about 7%.

It was the answer to the question posed in our earnings preview: after Alphabet, Microsoft, and Meta each delivered strong numbers and got a wary reception, could Amazon prove the cloud was reaccelerating fast enough to justify a capital-spending plan now measured in the hundreds of billions? On the AWS line, at least, the answer was an emphatic yes.

The quarter by the numbers

Amazon posted net sales of $200.6 billion, up 20% from $167.7 billion a year earlier and ahead of the roughly $196.9 billion analysts had modeled. It was the first time total revenue for a single quarter crossed the $200 billion mark.

• Operating income rose 43% to $27.5 billion, up from $19.2 billion a year ago and above the top end of Amazon’s own $20 billion–$24 billion guidance range.
• Net income came in at $62.6 billion, or $5.75 per share, versus $18.2 billion, or $1.68, in the same quarter last year.

That earnings figure carries a large asterisk, and Amazon flagged it directly: net income included roughly $53.4 billion in non-operating pre-tax income, driven primarily by a gain on the company’s equity stake in Anthropic. As the Claude maker’s valuation has climbed on the secondary market, the mark-to-market value of Amazon’s investment has swelled, and accounting rules flow that unrealized gain straight through the income statement. Strip it out and the profit picture is still strong — operating income up 43% is the number that reflects the actual business — but the $5.75 EPS headline overstates the quarter’s underlying earnings power by a wide margin.

AWS reaccelerates

The star of the report was the cloud. AWS revenue reached $42.2 billion, up 37% year over year — the division’s fastest growth in 18 quarters, or roughly five years. Analysts had projected growth closer to 31%, so the beat was decisive rather than marginal. At that pace, AWS is running at an annualized revenue run rate of about $169 billion.

The composition mattered as much as the headline. Amazon disclosed that AWS’s artificial intelligence business and its custom-silicon business — the Trainium and Graviton chips it designs in-house — had each surpassed a $25 billion annualized run rate, with both more than doubling from a year earlier. That is the clearest signal yet that the capacity Amazon has been pouring capital into is converting into billed revenue, and that its bet on designing its own accelerators rather than buying every chip from Nvidia is beginning to pay for itself.

The rest of the business held up:

• Advertising services revenue grew 26% to $19.8 billion, continuing to be one of Amazon’s highest-margin and fastest-growing lines.
• The North America and International retail segments both contributed to the operating-income beat, with the profit engine of retail and ads offsetting the margin drag from the heavier investment cycle.

Capex climbs again — and blames memory

If there was a line for the skeptics to seize on, it was spending. CEO Andy Jassy told investors on the earnings call that Amazon now expects capital expenditures of roughly $220 billion in 2026, up from the $200 billion figure the company had guided to in February and reaffirmed in April.

Jassy’s explanation was pointed: a meaningful share of the increase reflects rising memory prices. The memory supercycle that has driven DRAM and high-bandwidth memory costs sharply higher is now showing up directly in hyperscaler budgets, inflating the cost of building AI-capable data centers even where the underlying buildout plans have not changed. It is the same dynamic rippling across the industry, and a reminder that the AI infrastructure bill is being pushed up by component scarcity as much as by fresh capacity commitments.

Crucially, the market’s reaction to the higher number was the opposite of what greeted Alphabet a week earlier. When Google raised its capex forecast, the stock fell despite a revenue beat; investors read the spending as a cost without a clear return. Amazon lifted its capex guidance too — and the stock rose, because AWS’s 37% growth and the $25 billion AI and chip run rates gave investors something to point to on the other side of the ledger. The spending looked, for once, like it was buying revenue.

Why the reaction flipped

The through-line of this earnings season has been a market that stopped cheering AI revenue in isolation and started scrutinizing what it costs to produce. Alphabet beat and fell. Microsoft and Meta delivered and drew a wary reception. The bar for Amazon was never simply to beat — it was to demonstrate that the cloud franchise underwriting the whole capital plan was reaccelerating, not plateauing.

By that standard, Amazon cleared it. A 37% AWS growth rate — accelerating, not decelerating — reframes the capex debate. When the top line is compounding that fast, a $220 billion spending plan reads as feeding demand the company can actually see, rather than building ahead of demand it merely hopes will arrive. The industry-wide capex boom is not getting cheaper, but Amazon gave the clearest evidence this quarter that at least one hyperscaler is filling the capacity it is paying for.

What it means

Amazon delivered the season’s cleanest bull case for AI infrastructure spending — and the market rewarded it. The combination that eluded Alphabet, Microsoft, and Meta was on display here: accelerating cloud growth plus rising capex, with the growth arriving fast enough to make the spending look disciplined rather than reckless. That is why the stock rose on a higher capex number when peers fell on the same news.

The most important disclosure was the pair of $25 billion run rates for AWS’s AI business and its custom chips. It validates two of Amazon’s biggest strategic bets at once: that enterprises will rent AI capacity from AWS at scale, and that Amazon’s in-house Trainium silicon can carry a growing share of that workload instead of routing every dollar to Nvidia. If those lines keep doubling, they change the long-run margin math on the entire buildout — and they put pressure on rivals who are more dependent on merchant accelerators.

Two cautions belong in any honest read. First, the $5.75 EPS is flattered by a $53.4 billion Anthropic-related gain that has nothing to do with operations and could reverse if the AI investment climate cools; judge the quarter on the 43% operating-income growth, not the headline. Second, the capex increase is being driven partly by memory-price inflation, which is a cost the company is absorbing, not a choice it is making — a sign that component scarcity is quietly raising the price of the AI trade for everyone.

What to watch next: whether AWS growth holds in the high-30s or was flattered by easy comparisons; whether the $25 billion AI and chip run rates keep doubling into the back half of the year; and how far memory prices push 2027 capex when Amazon frames its next spending plan. For now, Amazon did what the rest of megacap could not this season — it made the AI bill look like an investment the market was willing to underwrite.