Amazon (NASDAQ: AMZN) Jumps Nearly 17% After Q2 Revenue Beat; AWS Cloud Growth Strengthens, Annual Target Raised to $220B

Amazon shares jumped as much as 17% on July 31, 2026, extending a sharp after-hours rally from its Q2 report. The stock had already surged over 9% in extended trading Thursday night. Amazon posted $200.6 billion in Q2 revenue, up 20% year-over-year, crossing $200 billion for the first time. 

AWS revenue climbed 37% to $42.2 billion, its fastest growth in 18 quarters, prompting Amazon to raise its 2026 capex target to $220 billion.

AWS Growth Reaccelerates to Multi-Year Highs

AWS revenue reached $42.2 billion in Q2 2026, beating the $40.54 billion analysts expected. Growth accelerated to 37% year over year, marking its fastest expansion since the quarter ended December 2021. Analysts had projected only 31% growth.

Cloud Segment Profitability Improves Sharply

• AWS operating income rose to $16.6 billion from $10.2 billion a year earlier.
• Operating margin for AWS expanded to 39.4% during the quarter.
• AWS now carries an annualized revenue run rate of $169 billion.

CEO Andy Jassy said AWS’s AI and custom chip businesses each topped $25 billion in annual run rate. That milestone shows AI demand is now a material, not marginal, revenue driver.

Total Revenue and Profit Beat Every Estimate

Amazon’s (NASDAQ: AMZN) total net sales reached $200.6 billion, comfortably above the $196.47 billion analysts expected. Operating income rose 43% to $27.5 billion from $19.2 billion a year earlier.

• Net income surged to $62.6 billion, or $5.75 per diluted share.
• That compares with $18.2 billion, or $1.68 per share, in Q2 2025.
• Results included a $53.4 billion non-operating gain tied to Amazon’s Anthropic stake.

Excluding that one-time gain, core operating performance still beat expectations across every major segment. That breadth is what separated Amazon’s reaction from other Big Tech earnings this week.

Segment Performance Across Amazon’s Business

Advertising and Retail Both Post Solid Gains

Amazon’s advertising business grew 26% year-over-year to $19.8 billion in Q2. North America segment sales rose 16% to $116.2 billion, while international sales increased 15% to $42.2 billion.

• Advertising revenue growth outpaced overall company revenue growth for the quarter.
• North America remains Amazon’s largest single revenue contributor by a wide margin.
• International segment margins continue improving as logistics investments mature.

This diversified growth, spanning cloud, ads, and retail, is why the reaction looked different from Meta’s nearly 10% post-earnings drop the same week.

Capex Guidance Raised to $220 Billion

Amazon raised its 2026 capital expenditure guidance to $220 billion, up from its prior $200 billion target. Trailing 12-month property and equipment purchases already reached $169 billion, up 64% year-over-year.

• Free cash flow swung to a $7.6 billion outflow versus an $18.2 billion inflow last year.
• Higher AI infrastructure spending is the primary driver behind rising capex.
• Amazon guided Q3 revenue between $197 billion and $202 billion, implying 9% to 12% growth.

Rising capex alongside strong backlog growth reassured investors that spending is chasing already-contracted demand, not speculative buildout.

How Amazon’s Print Compares to Big Tech Peers

Amazon’s cloud growth still trails Alphabet’s Google Cloud, which grew 82% last week, but topped Microsoft’s Azure growth of 43%. Meta’s stock fell nearly 10% on weaker free cash flow, while Alphabet also dropped despite beating estimates. Amazon’s backlog growth, unlike Meta’s internally-focused AI spending, gave investors concrete proof of contracted future revenue.

$AMZN Q2 Earnings are out. An absolute monster quarter for AWS and custom chips.

​Numbers:
• Rev: $200.6B (Beat $196.4B)
• EPS: $5.75 (Heavily skewed by a $53.4B gain from the Anthropic stake)
• AWS: $42.2B (+37% YoY) re-accelerating to fastest growth in 18 quarters.
• AWS… pic.twitter.com/ktCj9Ul2jd

— Karol Kozicki (@k2__investment) July 30, 2026

Meyka Analyst Feedback

Amazon’s Q2 print stands out because every major segment beat expectations at the same time. AWS’s reacceleration to 37% growth, its fastest since 2021, changes the narrative around cloud competition heading into 2027. Raising capex to $220 billion while still expanding margins suggests spending discipline hasn’t been sacrificed for growth.

The bigger signal is Amazon’s growing AWS backlog, which gives investors visibility that peers like Meta currently lack. If AI and chip revenue keep compounding past their $25 billion run rates, Amazon’s premium valuation versus Microsoft and Alphabet could keep widening through the rest of 2026.

Disclaimer:

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