Amazon reported second-quarter 2026 revenue of $200.606 billion on July 30 Eastern Time, up 20% from a year earlier. Operating income reached $27.46 billion, a 43% increase.
AWS drew the most attention in the report. The cloud unit posted $42.23 billion in revenue, up 36.7%, the fastest pace in nearly 18 quarters. Amazon said AI remained the main engine behind the growth.
AWS growth accelerates and margin nears 40%
For the quarter, Amazon’s North America segment generated $116.18 billion in revenue, up 16% year over year. International revenue came to $42.2 billion, up 15%. AWS reported $42.23 billion, up 36.7%.
AWS operating income rose 64% from a year earlier, while operating margin expanded to 39.4% from 32.9%. The results showed that demand for AI infrastructure continued to lift profitability in the cloud business.
Chief Executive Officer Andy Jassy said AWS AI services and Amazon’s in-house chip businesses, Trainium and Graviton, have each surpassed a $25 billion annualized revenue run rate and are still growing at triple-digit percentage rates.
EPS jumps 242%, led by Anthropic valuation gains
Amazon posted net income of $62.65 billion in the second quarter, up 245% from a year earlier. Earnings per share climbed from $1.68 to $5.75.
Amazon also said the quarter’s net income included $53.4 billion in other income, mainly driven by valuation gains on its investment in AI startup Anthropic.
According to the article’s estimate, excluding that one-time gain, Amazon’s core profit for the quarter would have been about $21 billion to $23 billion, with EPS around $1.95. That would still represent growth of roughly 16% from a year earlier, but far below the headline gain of more than 240%.
In addition, about $55.7 billion in unrealized valuation gains was recorded directly in shareholders’ equity rather than EPS. Taken together, the article said Amazon’s pretax investment valuation gains recognized on its books this quarter may have reached about $109 billion.
AI spending pushes free cash flow into negative territory
Behind the strong revenue growth, Amazon continued to step up spending on AI infrastructure. Over the past 12 months, operating cash flow totaled $161.4 billion, up 33%, while capital expenditures rose 64% to $169 billion. Free cash flow swung from positive $18.2 billion a year earlier to negative $7.6 billion.
In the second quarter alone, spending on equipment and data centers reached $54.2 billion, up 68% from a year earlier. Amazon said the increase was mainly tied to AI infrastructure investment.
To support that spending, Amazon issued nearly $67 billion in new long-term debt in the first half of the year. Long-term liabilities increased from about $65.6 billion at the end of last year to $128.9 billion. Total assets rose above $1 trillion for the first time.
Advertising remains another fast-growing business
Outside AWS, Amazon’s retail and advertising businesses also posted steady gains. In the second quarter, online store revenue rose 15%, third-party seller services increased 16%, advertising revenue grew 26% to $19.8 billion, subscription services rose 12%, and the global number of paid units increased 17%.
The article said advertising has now grown by more than 22% for five straight quarters, and its revenue is approaching half the size of AWS, making it another high-margin growth driver for Amazon.
OpenAI commits to Trainium as Amazon rolls out Graviton5
Another focal point in the earnings release was Amazon’s first disclosure that OpenAI has committed to using Trainium AI chips. The filing said Anthropic and OpenAI have both signed multiyear agreements at multi-gigawatt scale, indicating that Trainium is moving beyond an internal cost-optimization tool and becoming an external AI chip platform.
Amazon also launched its new Graviton5 chip. The company said it delivers about 25% better compute performance than the prior generation. Among the top 1,000 EC2 customers, 98% are already using the Graviton platform.
The article said demand tied to Trainium and Graviton could extend to ASIC design, CoWoS packaging, substrates, thermal solutions and power supply in Taiwan’s semiconductor supply chain.
Third-quarter outlook slows, full-year capex moves higher again
For the third quarter, Amazon forecast revenue of $197 billion to $202 billion, implying year-over-year growth of about 9% to 12%. Operating income is expected to range from $22.5 billion to $26.5 billion.
Amazon said the timing of Prime Day differed from last year. Excluding that factor, third-quarter growth would be roughly 4 percentage points higher, or about 13% to 16%.
Among the risk factors, the company specifically cited volatility in memory chip supply. That reflects continued tightness in demand for advanced memory such as HBM for AI servers, which may affect the pace and cost of future data center buildouts.
Amazon raised its full-year capital expenditure plan to $220 billion, with nearly all of the incremental investment going into AI infrastructure. It also said Trainium’s annualized revenue has topped $25 billion, while both OpenAI and Anthropic have signed multiyear agreements.
The article added that, as AWS keeps expanding AI data centers and shipments of Amazon’s in-house ASICs increase, the market expects ASIC design service provider Alchip Technologies, listed as 世芯-KY (3661), to remain among the beneficiaries. It also pointed to potential benefits for suppliers involved in CoWoS advanced packaging, ABF substrates, cooling, server assembly and high-speed networking if AI capital spending continues to expand.