Amazon's Q2 Earnings Soar on Cloud Growth, AWS Revenue Hits New High

Amazon's second quarter earnings call revealed substantial growth across its cloud and retail segments. The company reported revenue of $200.6 billion, a 20% increase year-over-year driven by acceleration in AWS and steady demand in Advertising.

The operating income was $27.5 billion, up 43% from the same period last year, including a $1.2 billion benefit from tariff refunds and energy derivative accounting gains. Net income reached $62.6 billion, or $5.75 per diluted share, primarily reflecting a $53.4 billion non-operating pre-tax gain from the valuation of Amazon's investment in Anthropic.

Amazon Web Services (AWS) revenue grew 36.7% year-over-year to $42.2 billion, reaching an annualized revenue run rate of $169 billion and an operating margin of 39.4%. AWS backlog reached $496 billion, growing at a triple-digit percentage rate as customers commit to multiyear cloud and AI contracts.

Amazon is increasing capital expenditures to approximately $220 billion for 2026 to address the massive surge in generative AI demand and infrastructure needs, despite rising memory costs and logistical inflation. CEO Andy Jassy projected that AWS has the potential to eventually become 'a trillion-dollar annual revenue business' as enterprise IT spending continues shifting to the cloud.