Amazon Stock Soars 15% as AWS Posts $42.2B Quarter
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- Amazon stock soared 15% on Friday after Q2 earnings beat expectations, fueled by accelerating cloud growth at AWS.
- AWS generated $42.2 billion in Q2 revenue, up 36.7% year-over-year, while its backlog hit $496 billion growing triple digits year-over-year per CEO Andy Jassy.
- Amazon's AI and custom chip businesses each surpassed a $25 billion annualized revenue run rate, with custom chips growing at triple-digit YoY rates.
- Amazon raised its capital expenditure guidance to approximately $220 billion, up from prior guidance of around $200 billion.
- CEO Andy Jassy said demand for AI and cloud computing outstrips server capacity, noting 2027 planned expansion is already largely booked into 2028.
- CFRA Research's Arun Sundaram called the quarter a "home run," pointing out AWS now runs at a roughly $170 billion annual revenue run rate — over four times its 2019 size.
Why it matters: Wall Street embraced Amazon's increased ~$220 billion capex commitment because AWS's 36.7% YoY revenue growth and $496 billion backlog justify the spend. The $170 billion AWS run rate — over four times its 2019 size — means AI infrastructure demand is now propping up Amazon's valuation rather than weighing on it.
