Amazon reported second-quarter net sales of $200.6 billion on Thursday, blowing past analyst expectations of $197.01 billion. The e-commerce and cloud giant also posted operating income of $27.46 billion, well above the $23.61 billion Wall Street had forecast. Shares surged more than 6.5% in after-hours trading, climbing from a regular-session close of $235.50 to roughly $251.
AWS growth accelerates
Amazon Web Services generated $42.23 billion in revenue during the quarter, topping estimates of $40.57 billion. That marks roughly 37% year-over-year growth — the cloud division's fastest expansion in about 18 quarters. The strong performance from AWS, which remains Amazon's most profitable segment, helped drive the overall earnings beat.
Profitability surge
Amazon's operating margin expanded to 13.7%, well above the 12% analysts had modeled. Earnings per share came in at $5.75, far exceeding the consensus estimate of $1.82. The EPS figure included non-operating gains that contributed to the beat, though the company did not break out the exact amount from those items.
AI spending defended
CEO Andy Jassy has defended Amazon's aggressive capital investment strategy. The company plans to spend roughly $200 billion during 2026 on AI data centers, networking infrastructure, and custom silicon. Thursday's earnings report reinforced investor confidence that those outlays are translating into accelerating cloud growth and stronger profitability.
Jassy has argued that the AI buildout is necessary to meet customer demand and that Amazon is seeing a clear return on its investments. The market appears to agree — the after-hours rally suggests shareholders are willing to give the company leeway on spending as long as the results follow.
The question now is whether Amazon can sustain this pace. AWS growth has reaccelerated, but the broader economy and competition from Microsoft and Google remain factors. For now, investors are betting the AI bet is paying off.
