Amazon reported better-than-expected revenue and cloud growth for the second quarter, sending its stock up more than 9% in extended trading.
Revenue in Amazon's cloud segment, AWS, expanded 37% year over year during the quarter, surpassing Wall Street's expectations for 31% growth. That marked the unit's fastest growth since 2021, according to Amazon CEO Andy Jassy, who said in the earnings release that AWS is "booming."
Investors had been closely watching AWS growth after rival cloud providers posted strong results. Alphabet last week reported Google Cloud growth of 82%, while Microsoft's Azure cloud revenue rose 43% during its fiscal fourth quarter.
Jassy also pointed to the growth of Amazon's artificial intelligence and in-house chip units, both of which exceeded a $25 billion annual revenue run rate. Amazon's chip division includes the Trainium and Graviton brands, while its AI products, such as the Bedrock model marketplace, are primarily aimed at enterprise customers.
Spending and cash flow
Amazon continues to balance heavy AI-related investment with investor expectations for returns. Capital expenditures during the quarter reached $54.2 billion, compared with $32.1 billion a year earlier. As a result, the company's free cash flow for the trailing twelve months turned negative, recording an outflow of $7.6 billion, versus an inflow of $18.2 billion a year earlier.
Guidance and Prime Day impact
For the current quarter, Amazon guided for revenue between $197 billion and $202 billion, below analyst expectations of $204.1 billion polled by LSEG. The company attributed the gap to tough comparisons following its decision to move this year's Prime Day event to June instead of July. Excluding the Prime Day timing shift, Amazon said third-quarter 2026 growth "would be nearly 400 basis points higher."
