Amazon.com, Inc.

Amazon reported Q2 2026 revenue of $200.6 billion, up 20% year over year, and operating income of $27.5 billion, up 43% year over year. AWS revenue was $42.2 billion, up 36.7% year over year, and Amazon Ads revenue was $19.8 billion, up 26% year over year. North America revenue was $116.2 billion, up 16%, and International revenue was $42.2 billion, up 15% excluding FX. Cash CapEx was $53.1 billion in Q2, and management now expects approximately $220 billion in cash CapEx in 2026, up from an earlier estimate of about $200 billion. For Q3, Amazon guided to net sales of $197 billion to $202 billion and operating income of $22.5 billion to $26.5 billion. The company said Q3 growth is being held back by Prime Day timing and about 80 basis points of unfavorable FX.

Andy Jassy framed the quarter as evidence that Amazon is benefiting from multiple long-term inflections at once, especially in AWS, AI, ads, and faster commerce. He emphasized that AWS is seeing strong demand across both AI and core infrastructure, and said the business could ultimately become at least a few hundred billion dollars in annual revenue and possibly a trillion-dollar business over time. He also said Amazon is building agentic and AI products across the stack, including Bedrock, Q, Kiro, Transform, and Continuum, while stressing that AWS can be highly successful even without owning the frontier model itself.

Brian Olsavsky highlighted broad-based top-line strength, with revenue up 20% and operating income up 43%, while noting that Q2 operating income included roughly $1.2 billion of expense reduction benefits: about $600 million of tariff-related refunds and about $600 million from energy contract fair value changes. He said AWS operating income was $16.6 billion and that AWS margins expanded 650 basis points year over year, or 520 basis points excluding the derivative gain, driven by efficiency gains and capacity optimization. He also said Q2 cash CapEx was $53.1 billion, that 2026 CapEx is now expected to be about $220 billion, and that Q3 guidance reflects Prime Day timing and FX pressure.

Analysts focused on whether AI workloads are inherently lower margin and whether AWS’s 39% operating margin is sustainable; Brian said AWS profitability reflects disciplined efficiency, capacity optimization, and fixed-cost control, though margins will fluctuate with mix and investment levels. Andy said AI margins are tracking the earlier core-cloud pattern and that AWS does not need its own frontier model to win, though Amazon is still pursuing one for cost control, prioritization, and speed. Questions also pressed on capacity timing, 2027/2028 demand, and Trainium commercialization; Andy said demand is already largely reserved through 2027 and into 2028, and that Amazon is actively exploring offering Trainium to third-party data centers in the future.