Amazon.com (NASDAQ: AMZN) reported stronger-than-expected second-quarter revenue on Thursday, driven by its fastest cloud computing growth in more than four years, while issuing a third-quarter sales forecast that fell short of Wall Street expectations.
The mixed results sent the company’s shares up as much as 9% in after-hours trading.
The company posted revenue of $200.6 billion for the quarter ended June 30, exceeding analysts’ consensus estimate of $196.16 billion.
Amazon reported earnings per share (EPS) of $5.75. It was not directly comparable to consensus estimates because the reported figure included a large investment-related gain.
Second-quarter net income included $53.4 billion in non-operating pre-tax other income, primarily related to Amazon’s investment in AI startup Anthropic.
AWS Delivers Fastest Growth in 18 Quarters
Amazon Web Services (AWS), the company’s cloud computing division, generated $42.2 billion in revenue, up 37% year over year and ahead of analysts’ expectations for roughly 31.2% growth, according to LSEG.
Chief Executive Andy Jassy said the quarter marked AWS’ fastest revenue growth in 18 quarters, adding that AWS’ AI business and custom chip business had each surpassed a $25 billion annual revenue run rate.
The results follow similarly strong cloud performance from Microsoft (NASDAQ: MSFT) and Alphabet (NASDAQ: GOOG), as major technology companies continue to invest heavily in AI infrastructure to meet rising enterprise demand.
Amazon has said those investments are aimed at expanding capacity constrained by growing AI workloads. AWS demand has also been supported by partnerships with companies including OpenAI, Anthropic, Meta Platforms (NASDAQ: META), Pinterest (NYSE: PINS) and Snowflake (NYSE: SNOW).
Amazon Continues Heavy AI Infrastructure Spending
Amazon continued to expand its artificial intelligence infrastructure, with trailing 12-month purchases of property and equipment, net of proceeds from sales and incentives, rising to $169 billion, largely reflecting higher spending on property and equipment to support AI investments.
The company reported a trailing 12-month free cash flow outflow of $7.6 billion, compared with an $18.2 billion free cash flow inflow a year earlier.
Third-Quarter Revenue Outlook Misses Estimates
For the current quarter, Amazon expects revenue to come in between $197 billion and $202 billion, compared with analysts’ average estimate of $203.9 billion.
The company expects operating income between $22.5 billion and $26.5 billion, compared with $17.4 billion in the same period last year.
Advertising Business and Prime Delivery Performance
Beyond cloud computing, Amazon’s advertising business remained a key growth driver, with revenue increasing 26% year over year to $19.8 billion. Jassy also said Prime delivery speeds reached record levels during the first half of the year.
During the quarter, Amazon also held its annual Prime Day shopping event from June 23 to June 26. According to Adobe Analytics, the promotion generated more than $26.4 billion in online spending across retailers, driven by demand for electronics, appliances, and everyday household items.
