The Seattle-based technology and e-commerce company said Thursday that robust growth in its cloud computing business helped lift quarterly revenue and profit. Company executives also said demand for AI services continues to exceed available computing capacity.
Amazon shares rose more than 9% in after-hours trading following the earnings announcement.
AWS Powers Growth
Amazon Web Services (AWS) remained the company’s strongest growth engine during the April-to-June quarter.
Revenue from AWS increased 37%, accelerating from 28% growth in the previous quarter. The result marked the cloud division’s fastest growth in 18 quarters.
AWS has become central to Amazon’s AI strategy as businesses continue increasing spending on generative AI services and cloud computing.
President and CEO Andy Jassy said AWS is “booming.” He added that both Amazon’s AI business and its custom chip operations have each surpassed annualized revenue run rates of more than $25 billion.
Amazon Expands AI Investment
During a conference call with investors, Jassy said Amazon now expects capital expenditures to total $220 billion this year. The revised plan is up from the $200 billion budget announced in February and significantly higher than the $128 billion the company invested during all of last year.
Jassy said much of the increase reflects higher memory chip costs. The spending plan also includes investments in robotics, semiconductors and satellite infrastructure.
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Even with the larger budget, Amazon expects demand for AI infrastructure to remain stronger than available capacity.
“I believe this dynamic will also be true in 2027 too,” Jassy told investors. “In fact, the demand we already have for 2028 is striking.”
Quarterly Results Beat Expectations
Amazon reported net income of $62.65 billion, or $5.75 per share, for the quarter ended June 30.
During the same period last year, the company earned $18.16 billion, or $1.68 per share.
Net sales increased to $200.6 billion, up from $167.7 billion a year earlier.
According to the supplied material, analysts expected revenue of $197.03 billion, meaning Amazon exceeded Wall Street’s sales expectations.
Sales Outlook Remains Conservative
Despite reporting stronger quarterly results, Amazon issued a cautious forecast for the current quarter.
The company expects net sales to range between $197 billion and $202 billion.
According to FactSet, analysts had forecast revenue of about $203.9 billion.
The outlook suggests Amazon expects sales growth to moderate even as investment in AI infrastructure continues to accelerate.
Investors Watch AI Spending
Amazon was the last of the largest U.S. technology companies to report quarterly earnings, giving investors another opportunity to evaluate the financial impact of heavy AI spending across the industry.
According to the supplied material, Alphabet recently reported stronger-than-expected quarterly revenue, supported by 82% growth in its cloud business. However, its shares fell after the company increased its projected annual capital spending to between $195 billion and $205 billion.
Microsoft also reported stronger quarterly profit and continued growth in its Azure cloud platform. Unlike Amazon and Alphabet, the company did not announce a similarly large increase in AI-related capital spending, a development that helped support its share price.
The differing market reactions highlight investors’ continuing focus on whether massive AI investments will generate sufficient long-term returns.
E-Commerce Business Continues to Grow
Outside its cloud operations, Amazon said it continued improving delivery speeds through expanded use of robotics, artificial intelligence and warehouse automation.
Jassy said Prime members received the fastest deliveries in the company’s history during the first half of the year. Amazon delivered 40% more items on the same day or overnight compared with the previous year.
The company also more than doubled the number of new customers using its online pharmacy service during the first six months of the year. Same-day prescription deliveries increased nearly fivefold.
Amazon said it moved its annual Prime Day sales event from July to June this year. It also continued expanding small fulfillment hubs designed to deliver orders in as little as 30 minutes in dozens of cities across the United States and internationally.
The company acknowledged ongoing cost pressures from tariffs associated with President Donald Trump’s trade policies and higher shipping expenses linked to rising oil prices during the Iran conflict.
This report is based on reporting by The Associated Press.
