- Amazon reported second quarter 2026 results after the close on July 30, with AWS revenue up 37% year over year to about $42.2 billion, its fastest growth since 2021 and well ahead of the 31% analysts expected.
- CEO Andy Jassy said the AWS AI business and its custom-chips business have each passed a $25 billion annual run rate, and that AWS still will not have enough capacity to meet demand in 2026 or 2027.
- Amazon raised full-year capital spending to about $220 billion and reported a $496 billion AWS backlog. Shares rose roughly 9% in extended trading.
AWS reaccelerates to its fastest growth in years
Amazon said on July 30 that Amazon Web Services grew about 37% year over year in the second quarter to roughly $42.2 billion in revenue, the cloud unit's fastest expansion since 2021. The figure beat the 31% analysts had modeled and reversed several quarters in which AWS growth had trailed Microsoft Azure and Google Cloud. Total company net sales rose 20% to $200.6 billion, and operating income climbed 43% to $27.5 billion.
The reacceleration is the number that mattered to investors, because AWS is where Amazon's AI revenue shows up. Jassy told analysts the AWS AI business and the company's custom-silicon business, built around its Trainium chips, have each crossed a $25 billion annual run rate, evidence that the capital Amazon has poured into data centers is now converting into paid demand.
"AWS is booming, growing 36.7% year over year in Q2, and our AI and chips businesses each eclipsed run rates of more than $25 billion. We have a clear line of sight to strong financial returns on these investments."Andy Jassy, Amazon CEO, on the Q2 2026 earnings call, via CNBC
The demand signal, and the spending it requires
Jassy paired the strong quarter with a bigger bill. Amazon raised its 2026 capital spending guidance to about $220 billion, up from a prior $200 billion, citing higher memory costs, and warned that even that will fall short of what customers want. He described demand visibility into 2028 as striking, and repeated his view that AWS could eventually become a trillion-dollar annual revenue business.
The AWS backlog, the value of contracted work not yet recognized as revenue, reached $496 billion, a figure that gives the spending a concrete demand anchor rather than a speculative one.
| AWS year-over-year growth | 37%, fastest since 2021 |
| AWS backlog of contracted, unrecognized revenue | $496 billion |
| Full-year 2026 capital spending | About $220 billion, raised from $200 billion |
| Total net sales | $200.6 billion, up 20% |
One caveat on the headline profit
Amazon reported net income of $62.6 billion, or $5.75 per diluted share, a figure that more than tripled from a year earlier. Most of that jump came from a gain on Amazon's stake in Anthropic rather than from operations, so the $27.5 billion operating income is the cleaner read on the underlying business. Even on that measure, the quarter was strong, and the market treated it that way, sending Amazon shares up about 9% after hours.
The result closed a week in which every major cloud provider reported, and it reinforced the same divide running through the sector. The companies selling AI capacity to outside customers, Amazon and Microsoft, were rewarded. The ones still spending ahead of external revenue were not.
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