Amazon's stock price rose more than 10% in after-hours trading after the company released its second-quarter 2026 results. Market attention was focused on its cloud business, AWS, which saw its revenue growth hit a nearly 18-quarter high, significantly improving the company's overall profits.
AWS revenue growth hits near 18-quarter high
Amazon's financial report shows that its revenue in the second quarter was $200.6 billion, a year-on-year increase of 20%. Among them, AWS revenue was $42.2 billion, a year-on-year increase of 36.7%, making it the most watched data of the quarter.
The company's overall operating profit increased by 43% year-over-year to $27.5 billion. AWS operating margin rose to 39%, an increase of 650 basis points compared to the same period last year. Excluding cloud business, North American revenue grew by 16%, and international revenue grew by 15% at constant currency.
Advertising revenue grew 26% year-over-year to $19.8 billion. Meanwhile, its fresh food delivery business expanded to 2,300 cities across the United States, demonstrating that Amazon's growth this quarter was not reliant on a single segment.
- Second quarter revenue: $200.6 billion
- AWS revenue: $42.2 billion
- After-hours stock price increase: over 10%
AI demand drives up capital expenditure
During the earnings call, management continued to emphasize AWS's long-term growth potential. Amazon CEO Andy Jassy stated that AWS is "very likely" to grow into a business with annual revenues of $1 trillion.
Amazon also confirmed that its capital expenditures in 2026 will reach $220 billion, up from the previously projected $200 billion. The company stated that as industry demand for AI infrastructure rises, the cost of components such as memory chips is also increasing.
The financial report also shows that AWS has a backlog of $496 billion in orders, with annualized revenue of $169 billion. Meanwhile, the annualized revenue of its AI and chip-related businesses has exceeded $25 billion each.
Third-quarter guidance was below expectations.
Despite strong results this quarter, Amazon's revenue guidance for the third quarter is $197 billion to $202 billion, below some analysts' expectations. The company stated that Prime Day fell in the second quarter this year, affecting year-over-year comparisons; currency factors may also have dragged down third-quarter revenue growth by approximately 80 basis points.
In addition, Amazon expects fuel and trunk transportation costs in its logistics network to continue to rise. Jassy also stated that the company will still be unable to meet full demand in 2026, and the capacity shortage may continue into 2027.
However, judging from after-hours stock performance, the market is currently more focused on AWS's growth momentum than on short-term cost pressures and conservative quarterly guidance. Investors are still betting on whether Amazon can leverage the demand for AI infrastructure to further expand its cloud business.
