The headline numbers
Amazon reported earnings per share of $5.75, blowing past the $1.82 analysts had expected. Revenue hit $200.6 billion, comfortably clearing Wall Street’s roughly $196.5 billion estimate — up 20% year-over-year. The reaction was immediate: the stock shot up more than 10% in extended trading.
The number everyone was watching: AWS
Cloud has been the make-or-break metric for every Big Tech earnings this season, and Amazon delivered. AWS revenue jumped 37% to $42.2 billion — the fastest pace of growth since the fourth quarter of 2021 — crushing the roughly $40.6 billion analysts had forecast. That also blew past Wall Street’s expectation of 31% growth. AWS generates about a fifth of Amazon’s total revenue but drives most of its operating profit, which is exactly why this number moved the stock so much. It marked the fifth straight quarter of accelerating cloud growth, and margins told the same story: AWS operating margin expanded to 39%, up 650 basis points from a year earlier — a jump analysts weren’t really expecting.
Amazon isn’t slowing the spending, either
Amazon raised its expected 2026 capital spending from $200 billion to roughly $220 billion, money largely going toward AI data centers and infrastructure. Normally that kind of spending hike spooks investors — but this time, the growth numbers gave them cover. Despite the higher capex guidance leading to a net free-cash-flow outflow over the trailing 12 months, the market shrugged it off, favoring the long-term payoff of AI infrastructure over near-term cash concerns.
The line that stole the earnings call
CEO Andy Jassy made the boldest claim of the report, telling analysts AWS could very possibly become a trillion-dollar annual revenue business in time. He also added a dose of realism: even with all the spending, Amazon still won’t have enough capacity to meet all its 2026 demand — and that capacity crunch will likely stretch into 2027 too.
Why this matters beyond Amazon
This report lands right after Microsoft’s record-breaking $450 billion single-day market cap gain earlier in the week, also driven by blowout Azure cloud numbers. Between Microsoft’s Azure (up 43%), Google Cloud’s 82% growth reported last week, and now Amazon’s AWS reacceleration, the pattern is becoming impossible to ignore: the massive, once-questioned AI infrastructure spending by Big Tech is now translating into real, accelerating cloud revenue — not just capex headlines. That’s a big reason markets are treating this earnings season as a turning point in the AI trade rather than another round of spending anxiety.
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