Amazon beats second quarter estimates as AWS posts fastest growth in 18 quarters

Amazon reported second quarter results that comfortably exceeded Wall Street expectations as accelerating demand for its cloud computing and artificial intelligence services lifted revenue and earnings.

The company posted earnings per share of $5.75 on revenue of $200.6 billion, surpassing analysts’ forecasts of $1.82 per share and $197 billion in revenue. Net income reached $62.6 billion, although the figure included $53.4 billion in pre-tax gains primarily related to Amazon’s investment in Anthropic.

Amazon Web Services delivered the strongest performance within the business. The cloud division generated quarterly revenue of $42.2 billion, up 37% from a year earlier and marking its fastest growth in 18 quarters. Market analysts had expected AWS revenue of about $40.5 billion. Operating income for the unit climbed to $16.6 billion from $10.2 billion in the same period last year.

Chief Executive Officer Andy Jassy said AWS recorded its fastest quarterly growth in 18 quarters while the company’s artificial intelligence and custom chip businesses each surpassed annualized revenue run rates of more than $25 billion. The results followed strong cloud earnings released by Microsoft a day earlier, reinforcing investor confidence in the returns from large-scale AI infrastructure spending.

Despite the strong quarterly performance, Amazon’s guidance for the third quarter fell short of market expectations. The company projected net sales between $197 billion and $202 billion, representing annual growth of 9% to 12%. Analysts had expected revenue of roughly $204 billion. Amazon forecast operating income between $22.5 billion and $26.5 billion, compared with $17.4 billion in the same quarter last year.

Second quarter operating income increased 43% year over year to $27.5 billion. Free cash flow over the trailing twelve months declined to a negative $7.6 billion as Amazon accelerated investment in AI infrastructure. Capital expenditures increased by $66.1 billion from the previous year as the company expanded its technology capacity.

Amazon shares rose in after-hours trading following the earnings release. The results capped a mixed week for major technology companies. Microsoft and Amazon both exceeded market expectations, while Meta Platforms disappointed investors with weaker guidance and declined to provide capital expenditure forecasts for 2027. Alphabet had also raised investor concerns the previous week after outlining plans for $205 billion in capital spending.

Amazon also said it has begun leasing chip capacity to Meta, OpenAI, and Anthropic. Jassy added that the company may eventually sell Amazon-designed chips directly to customers operating their own data centers.