Amazon's AWS Blows Past Estimates, Sending Hyperscalers Soaring

Amazon's AWS division reported a stunning 37% year-over-year revenue growth in Q2, crushing estimates of $40.5 billion and reaching $42.2 billion. This sent Amazon's stock soaring by 15.3%, while the entire hyperscaler complex rallied, pushing top AI stocks to their best single-session gain in months.

The Nasdaq Composite rose 1% to 25,374, with Microsoft gaining 3% and Meta rising 3.3%. Alphabet, whose Google Cloud grew 82% in Q2 to $24.8 billion, climbed 6.7%, as investors revisited the company's own Q2 results in light of Amazon's blowout.

Amazon CEO Andy Jassy said the company expects capital spending to reach $220 billion in 2026, the largest single-year AI infrastructure commitment from any company on record. This validates a thesis that had faced pressure all year: that AI inference demand is translating into durable hyperscaler revenue growth.