Amazon announced better-than-expected second-quarter earnings on Thursday, with net sales climbing 20%. Cloud revenue was highlighted as a strong performer, contributing to a nearly 10% rise in Amazon's stock during after-hours trading.
The company's spending on property and equipment, which includes GPUs and land, reached $173 billion for the fiscal year ending June 30, an increase from $107.65 billion the previous year. Amazon also raised its 2026 capital expenditure forecast from $200 billion to $220 billion, despite dipping into cash reserves, ending the quarter with $7.6 billion less cash than a year ago.
AWS revenue grew 37% year-over-year, hitting $42 billion for the quarter. CEO Jassy stated that the AI business is expected to follow a similar margin trajectory to the core business, noting that AWS and Amazon Bedrock can succeed without their own frontier model.
This trend is not unique to Amazon, with Microsoft and Google also seeing stock increases after strong cloud revenue reports. Conversely, companies like Meta, with significant capital expenditure but no clear revenue source, have faced investor skepticism, with Meta's stock falling 8% after its earnings report.