Amazon's AI Bet Pays Off: Revenue Jumps 18%, No Dividends Yet

Amazon's decision not to pay dividends has been a topic of discussion among investors. Despite its massive market cap, the company has continued to plow money back into research and development, particularly in artificial intelligence. This strategy has led to unprecedented growth for Amazon, with revenue increasing by 18% to $382 billion in the first half of 2026.

The company's cloud computing arm, Amazon Web Services (AWS), accounted for a significant portion of this growth, generating $79 billion and providing nearly $31 billion in operating income. This level of investment is necessary to stay ahead in the AI race, and Amazon has been willing to put its capital where it sees the most potential.

One reason Amazon may not be paying dividends right now is that it's choosing not to. The company can allocate its capital more profitably elsewhere, rather than distributing it to shareholders. This strategy has worked well for Warren Buffett's Berkshire Hathaway, which also avoids dividend payments.

The lack of a dividend also provides tax advantages for Amazon. When the company invests in capex or share repurchases, these are treated as expenses and don't incur taxes. On the other hand, when shareholders receive dividends, they pay taxes on them, between 0% and 37%, depending on IRS rules.