Amazon Stock Surges 7% on Q2 Earnings Beat, 37% AWS Growth

AMZN shares rose about 7% in after-hours trading after Amazon reported second-quarter revenue of $200.6 billion, up 20% year over year and ahead of the roughly $196.4 billion analysts had modeled. The number that moved the stock was Amazon Web Services: cloud revenue reached $42.2 billion, up 37% , well above the roughly 31% growth consensus expected and the segment's fastest expansion in about 18 quarters.

The headline profit figure needs a caveat that the initial coverage largely skipped. Net income of $62.6 billion, or $5.75 per diluted share, includes $53.4 billion of non-operating pre-tax other income that Amazon attributes primarily to its investment in Anthropic . That is a mark-to-market gain on a stake, not cash generated by the business. The operational read is operating income of $27.5 billion, up 43% year over year, which is a strong result on its own terms but roughly a third of the headline number.

Segment detail supports the cloud story. North America net sales were $116.2 billion, up 16%, with segment operating income of $9.1 billion; international net sales were $42.2 billion, up 15%. Within AWS, Amazon said its AI and custom-silicon businesses have each independently passed $25 billion in annualized revenue, more than doubling year over year. Management also lifted full-year capital expenditure guidance to roughly $220 billion, citing higher memory prices feeding into AI infrastructure costs.

What to watch from here is the gap between the quarter and the outlook. Third-quarter guidance of $197 billion to $202 billion in revenue and $22.5 billion to $26.5 billion in operating income both sit below where consensus had been, and trailing-twelve-month free cash flow is negative on the capex build. The durability of the AWS reacceleration, rather than the Anthropic mark, is what may determine whether the after-hours move holds.

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