Amazon Sales Jump 20% as AWS AI Surges
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- Amazon reported Q2 net sales of $200.6 billion, a 20% increase that beat S&P Capital IQ expectations of $196.4 billion, with shares surging 9.4% in after-hours trading.
- Amazon Web Services posted 37% sales growth, driven by triple-digit expansion in both its AI business and its chips unit, each now representing a $25 billion annualized revenue rate.
- Amazon's North America sales rose 16% and international sales climbed 15%, while net income hit $62.6 billion — of which $53.4 billion was a pre-tax gain tied to its stake in Anthropic.
- Amazon's trailing-twelve-month free cash flow flipped to a $7.6 billion outflow from an $18.2 billion inflow a year earlier, reflecting heavy AI-related spending.
- Microsoft and Alphabet's Google Cloud also comfortably beat Wall Street estimates for cloud revenue, per Reuters, mirroring Amazon's results.
- Axios frames the quarter as evidence the AI-driven cloud economy is booming even as questions mount over whether the investment cycle is sustainable.
Why it matters: Amazon's headline-beating quarter is really two stories: operational AI momentum (AWS up 37%, with AI and chips each at a $25B run rate) versus a financial structure where $53.4B of $62.6B net income came from paper gains on its Anthropic stake — while the $7.6B free cash flow reversal shows Amazon is still writing huge checks to stay in the AI race alongside Microsoft and Google Cloud.
