"AWS is booming," said Amazon CEO Andy Jassy, highlighting a 36.7% revenue jump for the cloud division in Q2. This surge marks the fastest growth AWS has seen in 18 quarters, pushing its annualized revenue run rate to about $169 billion. Operating income from AWS climbed to $16.6 billion, up from $10.2 billion a year ago, contributing roughly 60% of Amazon’s total operating income despite making up just 21% of overall revenue.
Amazon’s total net sales soared 20% year-over-year to $200.6 billion, comfortably beating Wall Street’s $196.5 billion estimate. North American revenue rose 16% to $116.2 billion while international sales added 15%, reaching $42.2 billion. Operating income jumped 43% to $27.5 billion, driven by strong performances in both the cloud and advertising segments. Advertising alone grew 26% to nearly $20 billion, reinforcing Amazon’s ability to diversify high-margin revenue sources beyond AWS.
Despite raising its 2026 capital expenditure forecast from $200 billion to $220 billion, Piper Sandler remains confident in Amazon’s momentum. The firm boosted its price target to $320, noting that the increased investment aligns with the company’s solid growth. Investors appeared reassured by Amazon’s ability to manage rising AI infrastructure costs while amplifying its core businesses. Recent trends such as expedited Prime deliveries, with more same-day and overnight shipments, also bolster Amazon’s competitive edge in e-commerce logistics.
The strong quarterly results come amid broader shifts in tech spending, where companies weigh AI infrastructure investments carefully. Amazon’s cloud and advertising growth offer a hedge against market volatility, positioning the company well ahead of its 2026 expansion goals. As AWS continues to dominate cloud profits, this performance stands out compared to other tech giants facing pressure in their cloud businesses.
This material is for informational purposes only and does not constitute financial advice.
