Amazon Q2 Revenue Jumps 20% as AWS AI Hits $25B Rate
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- Amazon reported Q2 net sales of $200.6 billion, up 20% year-over-year and beating S&P Capital IQ expectations of $196.4 billion.
- Amazon Web Services posted 37% sales growth, with its AI and chips businesses both expanding at triple-digit rates to a combined annualized revenue run rate of $25 billion.
- Amazon shares surged 9.4% in after-hours trading following the report, while North America sales rose 16% and international sales rose 15%.
- Amazon recorded $62.6 billion in net income, with $53.4 billion of that attributable to pre-tax gains on its investment in Claude maker Anthropic.
- Amazon's free cash flow over the trailing 12 months swung to a $7.6 billion outflow, down from an $18.2 billion inflow a year earlier, as the company invests heavily in AI infrastructure.
- The cloud performance mirrored solid Q2 beats from rivals Microsoft and Alphabet's Google, both of which exceeded Wall Street cloud-revenue estimates, per Reuters.
Why it matters: Roughly 85% of Amazon's $62.6 billion net income ($53.4B) is a paper gain on its Anthropic stake, while free cash flow flipped from an $18.2 billion inflow to a $7.6 billion outflow — meaning the quarter's headline profit is mostly an accounting line while AI capex is now consuming cash the business was generating a year ago, a trade-off investors nonetheless rewarded with a 9.4% after-hours surge.
