Analysis
Amazon reported second-quarter net sales of $200.6 billion, up 20% year-over-year and above the $196.47 billion Wall Street had modeled, crossing $200 billion in quarterly revenue for the first time in the company's history. Net income reached $62.6 billion, or $5.75 per diluted share, more than triple the $18.2 billion, or $1.68 per share, Amazon reported in the same quarter a year earlier.
AWS, the company's cloud unit, was the standout: $42.2 billion in revenue, up 37% year-over-year, its fastest growth rate in 18 quarters and comfortably ahead of the $40.54 billion analysts expected. AWS operating income climbed to $16.6 billion from $10.2 billion a year earlier, an operating margin of 39.4%. Amazon disclosed that its AI and custom chip businesses inside AWS have each individually crossed $25 billion in annualized run rate -- the clearest evidence yet that Amazon's Trainium and Inferentia silicon strategy, long treated as a hedge against Nvidia dependence, is now a real, disclosed line of revenue rather than an R&D side bet.
“AWS operating income climbed to $16.6 billion from $10.2 billion a year earlier, an operating margin of 39.4%.”
CEO Andy Jassy said capital spending will reach roughly $220 billion for the year, with trailing-12-month capex already up 64% year-over-year to $169 billion, driven by AI infrastructure investment. That guidance lands Amazon squarely inside the same spending race as Microsoft, Meta, and Google, but -- like Microsoft and unlike Meta -- Amazon's growth numbers are accelerating in step with the spend rather than lagging behind it.
For investors tracking the hyperscaler capex cycle, AWS's 18-quarter-best growth print, delivered the same day as Microsoft's record rally, makes a third data point in favor of the market's emerging thesis: that 2026's AI infrastructure spending is starting to show up in disclosed revenue for the biggest cloud players, even as smaller AI-infrastructure-adjacent names get punished on demand-timing anxiety. What to watch: whether AWS's AI and chips run rates keep compounding, and whether the $220 billion capex guide holds through the back half of the year.
