Prime Highlights-
- Amazon’s revenue rises 20 percent to over $200 billion, with AWS climbing 37 percent to $42.2 billion.
- Amazon raises its 2026 spending estimate to $220 billion as AI investment accelerates.
Key Facts-
- Amazon’s AI cloud and chips businesses each top $25 billion in annual revenue run rate.
- Microsoft’s Copilot tool grows to over 30 million paid users.
Background-
Amazon has cleared analysts’ expectations, posting strong revenue and sales growth powered largely by its cloud, artificial intelligence and chips divisions.
Overall revenue rose 20 percent to more than $200 billion in the second quarter compared to the year before, while its cloud business, Amazon Web Services, climbed 37 percent to reach $42.2 billion.
Two of Amazon’s AI-related divisions grew by triple-digit percentages, with its AI cloud and chips businesses each exceeding $25 billion in annual revenue run rates. Amazon’s stock jumped more than 7 percent in after-hours trading following the results.
Amazon CEO Andy Jassy described AWS as booming during a call with analysts, adding that the division could eventually become a trillion-dollar annual revenue business.
He confirmed the company continues pursuing its own frontier AI model despite a report suggesting it was scaling back development of its Nova models, noting AWS also gives customers access to dozens of other AI models, including those from OpenAI and Anthropic.
Some AWS customers are using the platform to build their own smaller, proprietary foundation models rather than relying on larger models from competitors.
Amazon raised its 2026 capital expenditure estimate to $220 billion, up from its earlier forecast of $200 billion. Microsoft, Alphabet and Meta are likewise ramping up their AI infrastructure spending, and the four companies combined plan to invest close to $700 billion this year in data centers, chips and computing infrastructure.
Microsoft trimmed its total spending forecast to $175 billion, while Alphabet pushed its estimate up to $205 billion. Meta lifted its spending outlook to as much as $145 billion, nearly double its 2025 figure, as it continues pouring money into AI infrastructure. Microsoft’s Copilot tool has grown past 30 million paid users.
