Amazon Cloud Business Booms, Shares Soar Most Since 2012

Amazon's shares rose significantly on July 31 after the company reported rapid growth in cloud computing revenue, alleviating concerns about its high expenses for artificial intelligence.

The revenue at Amazon Web Services (AWS) jumped 37% to $42.2 billion, marking the fifth consecutive period of rising sales and the fastest pace since Q4 2021.

AWS generates around a fifth of Amazon's revenue and most of its operating profit, with analysts forecasting an average of $40.6 billion in sales.

Amazon is investing heavily in data centers and chips to take advantage of growing demand for AI and cloud computing services, with the company spending over $53 billion on property and equipment, including proceeds from some sales, by June 30.

The company raised its projection for 2026 capital expenditures to $220 billion from a previous estimate of $200 billion, with Chief Executive Officer Andy Jassy saying most of that spending would go towards AI.