Amazon raised its 2026 capital expenditure forecast to $220 billion, up $20 billion from its prior $200 billion projection, as CEO Andy Jassy pointed to surging AI demand during the company's second-quarter earnings call1,5. The company spent approximately $53.1 billion on capital expenditures during the June quarter alone.
Amazon Web Services revenue grew 37% year over year to $42.2 billion, beating analysts' expectations for 31% growth and marking the cloud unit's fastest expansion since 2021. AI demand was cited as the primary driver of that acceleration2. Amazon said its AWS AI business now has a run rate exceeding $25 billion.
The AWS backlog closed the quarter at $496 billion, up from $364 billion the prior quarter. Amazon's portfolio of in-house chips — including Graviton, Tranium, and Nitro — also exceeds a $25 billion run rate, according to the company.
Companywide, Amazon reported second-quarter revenue of $200.61 billion, up 20% year over year, beating the LSEG consensus estimate of $196.47 billion. Operating income rose 43% year over year to $27.46 billion, above the $23.57 billion consensus forecast. Operating income benefited from roughly $1.2 billion in lower expenses, including $600 million in tariff-related refunds and a favorable change in the fair value of energy contracts.
GAAP earnings per share came in at $5.75, up 242% year over year, though the figure included pre-tax gains of $53.4 billion in non-operating income primarily related to Amazon's investment in Anthropic. Amazon announced a $100 billion collaboration with Anthropic in April.
Second-quarter net income was $62.6 billion, compared with $18.2 billion a year earlier. Trailing twelve-month free cash flow swung to an outflow of $7.6 billion, versus an inflow of $18.2 billion one year prior.
For the third quarter, Amazon guided net sales to increase 9% to 12% year over year, to a range of $197 billion to $202 billion, and projected operating income of $22.5 billion to $26.5 billion. The company said third-quarter growth would be nearly 400 basis points higher excluding the impact of Prime Day timing shifts between this year and last.
Amazon shares surged 14% on Friday following the report. The stock reaction contrasted with Apple, which dropped 9% on the same day after issuing weak guidance for the current quarter, citing supply constraints tied to memory price increases and chip shortages3.
ANALYSIS The $20 billion capex increase — from an already elevated $200 billion baseline — underscores the scale of infrastructure buildout Amazon considers necessary to meet AI workload demand. The 37% AWS growth rate, paired with rapid backlog expansion, indicates that enterprise AI consumption is translating into committed cloud revenue. The negative trailing twelve-month free cash flow, however, illustrates the near-term cash cost of that buildout.