AI Boost: Amazon shares jump on blockbuster earnings, upbeat outlook

Amazon delivered a strong second-quarter performance, beating Wall Street's expectations on both revenue and profit. The results sent the stock sharply higher in after-hours trading. Revenue rose 20% year-on-year to $200.6 billion, while operating income climbed 43% to $27.5 billion. Net income also surged, supported by robust cloud growth and AI-driven momentum. (Sources: Yahoo Finance, The Wall Street Journal, TradingKey, Reuters)

Amazon Web Services (AWS) continued to power the company's growth, with revenue rising 37% year-on-year to $42.2 billion. The cloud division posted its fastest growth rate in more than four years as businesses increased spending on AI infrastructure and cloud services. The performance reinforced AWS' position as Amazon's biggest profit engine.

CEO said Amazon's AI-related businesses are scaling rapidly. The company's AI services and custom chip operations have each reached an annualized revenue run rate of more than $25 billion. Demand for Trainium AI chips and Graviton processors continues to rise as enterprises expand AI workloads.

Amazon announced plans to increase its 2026 capital expenditure by $20 billion, taking total planned investments to about $220 billion. The additional spending will be directed toward AI data centers, custom chips and cloud infrastructure to meet growing customer demand. Investors welcomed the company's willingness to invest aggressively in AI despite near-term pressure on free cash flow.

The earnings report strengthened investor confidence that Amazon's heavy AI investments are beginning to deliver meaningful returns. Faster AWS growth, rapidly expanding AI businesses and a bold infrastructure investment plan signaled strong long-term growth potential. The results further cemented Amazon's position as one of the leading beneficiaries of the global AI boom.