Amazon's stock experienced a significant uplift, trading higher after the company announced its second-quarter 2026 financial results, which were bolstered by a booming performance from its Amazon Web Services (AWS) cloud computing business. The e-commerce giant reported net sales of $200.6 billion, a 20% increase year-over-year, exceeding analyst expectations.
The star of the quarter was undoubtedly AWS, which saw its revenue climb 37% year-over-year to $42.2 billion. This marked the fastest growth for AWS in 18 quarters, underscoring the robust demand for cloud services, particularly those supporting artificial intelligence workloads. CEO Andy Jassy highlighted that both AWS's AI services and its custom chip business have achieved annualized revenue run rates exceeding $25 billion. This acceleration in cloud growth is a key factor in Amazon's strong financial performance, with AWS now contributing significantly to the company's overall operating profit.
While the company's overall net income was notably high at $62.6 billion, this figure included a substantial non-operating gain from investments. Investors focused on the operational strength, particularly the 43% year-over-year increase in operating income to $27.5 billion. Despite a substantial increase in capital expenditures, largely driven by AI infrastructure investments, Amazon's core cloud business demonstrated impressive profitability, with AWS operating margins holding strong. The company's outlook for the third quarter suggests continued growth, although at a more moderated pace.
