Amazon's Profit Surges, but Cash Flow Takes a Hit on AI Spending
Amazon's profit and cash flow moved in opposite directions in the second quarter of 2026 due to an investment gain driving earnings, while AI infrastructure purchases consumed a significant portion of its cash. The company reported net sales increased 20% to $200.6 billion, with diluted earnings per share reaching $5.75 from $1.68 a year earlier.
AWS was the main contributor, with sales growing 37% to $42.2 billion and segment operating income increasing to $16.6 billion from $10.2 billion. However, the company's retail operations remain profitable and growing, while AWS is absorbing enormous capital to meet AI demand.
The company guided net sales of $197.0 billion to $202.0 billion for the third quarter, representing growth of 9% to 12%, including an unfavorable currency impact of about 80 basis points. Operating income is expected between $22.5 billion and $26.5 billion, against $17.4 billion a year earlier.