Amazon Cloud Growth Fuels $340 Billion Market Value Surge

Amazon's shares surged nearly 14% on Friday after its cloud sales growth reinforced investor confidence in its massive AI bets. The tech giant posted its strongest cloud growth in over four years, indicating a fresh wave of demand that justifies its $220 billion planned capital spending for 2026.

The e-commerce and cloud titan's results come as a resounding sign to Wall Street that some of Big Tech's AI investments are already generating measurable returns. Amazon's cloud revenue jumped 37% in the second quarter, adding more than $340 billion in market value if gains hold.

However, there's a growing divide in investors' tolerance for the ever-increasing AI spend by Big Tech, set to exceed $730 billion this year. Meta and Google-parent Alphabet both slumped 7%, despite strong growth in revenues, after the companies raised their capital spending forecasts while free cash flows cratered.

Amazon's CEO Andy Jassy reassured investors that the company is only pouring money into serving demand that already exists, with a majority of available Amazon cloud capacity for 2027 and some capacity for 2028 having already been reserved by customers.