Amazon Q2 Revenue Tops $200B as AWS Posts 18-Quarter Growth High
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- Amazon Q2 revenue reached ~$200.6 billion, beating estimates by over $4 billion and rising nearly 20% year-over-year, with operating income surging more than 43%.
- Amazon Web Services posted its fastest growth in 18 quarters, with revenue of $42.2 billion beating estimates by ~$1.7 billion and climbing 37% year-over-year.
- Amazon raised its 2026 capital expenditure guidance from $200 billion to $220 billion, driven largely by surging memory prices, making it the highest-spending hyperscaler on AI infrastructure.
- Amazon booked a pre-tax gain of more than $53 billion largely from its stake in Anthropic, while free cash flow swung negative by ~$7.6 billion in the quarter.
- Andy Jassy told analysts current capacity won't meet 2026 demand and that booked demand for 2028 is already "striking," arguing data center investments monetize over 30+ years while servers break even in under 3 years against 5-year AI contracts.
- Amazon shares jumped roughly 15.3% on the day of the report despite the deteriorating free cash flow.
Why it matters: Amazon is committing $220 billion in 2026 capex — more than any other hyperscaler — yet CEO Jassy argues the math works because data centers generate revenue for 30+ years and servers break even in under 3 years on 5-year AI contracts. Markets validated the conviction: AMZN jumped ~15% in a single session even as free cash flow turned negative by $7.6 billion.
