Amazon Reports First $200 Billion Quarter Driven by AI Demand

Amazon.com Inc. reported its first quarterly revenue exceeding $200 billion for the second quarter ended June 30, 2026, posting net sales of $200.6 billion and earnings per share of $5.75. This performance significantly beat analyst projections of $197.01 billion in revenue and $1.82 EPS. The results were primarily propelled by Amazon Web Services (AWS), which saw its fastest growth in 18 quarters with a 37% revenue surge to $42.2 billion. Advertising services also grew 26% to $19.8 billion.

The company's net income of $62.6 billion was heavily bolstered by a $53.4 billion non-operating gain from its investment in the AI startup Anthropic. However, heavy investment in AI infrastructure caused free cash flow to turn negative, with a $7.6 billion burn on a trailing 12-month basis. To address rising memory chip costs and persistent AI demand, CEO Andy Jassy increased the 2026 annual capital expenditure forecast from $200 billion to $220 billion.

Jassy noted that computing capacity remains insufficient to meet current needs, stating that much of the 2027 and some 2028 capacity is already reserved. Despite this optimism and a record AWS backlog of $496 billion, Amazon issued third-quarter revenue guidance between $197 billion and $202 billion, which fell slightly below analyst expectations. Following the announcement, Amazon's stock surged between 9% and 14% in subsequent trading sessions.