Amazon Surges on Blowout Earnings as AWS Continues Explosive Growth

Amazon's second-quarter financial results exceeded expectations, sending its stock soaring by 14% on July 31. This surge added $25 billion to Jeff Bezos' net worth, making him the world's third-richest person.

The biggest story behind Amazon's success is the explosive growth of its cloud segment, Amazon Web Services (AWS). Revenue from AWS jumped 37%, with operating income climbing 63% to $16.6 billion, accounting for 60% of Amazon's total. This segment has a backlog of almost $500 billion and continues to experience incredible demand for computing resources.

The company's capital expenditures are set to reach a whopping $220 billion in 2026, up from the prior outlook of $200 billion three months ago. This is driven by higher memory costs, which management cited as the reason for the increased spending plan.