Amazon Reports Strong Q2 Earnings Amid Raised Capex Guidance
Amazon delivered strong second-quarter earnings, significantly beating Wall Street estimates for both revenue and operating income. Revenue reached $200.6 billion, surpassing expectations by over $4 billion with a year-over-year increase of nearly 20%. Operating income surged more than 43%, driven in part by a pre-tax gain from Amazon's stake in Anthropic. Despite concerns about negative free cash flow due to heavy AI infrastructure investments, CEO Andy Jassy expressed confidence in the long-term returns on these capital expenditures. Jassy highlighted surging demand for AWS and announced an increase in 2026 capex guidance to $220 billion from $200 billion. He emphasized that this investment is necessary due to high AI-related demand, which he expects will continue into the next few years. Jassy outlined a two-part strategy: long-term data center investments with extended monetization periods and shorter-cycle server purchases offering quicker returns through multi-year contracts. The market responded positively, with Amazon's stock rising over 13% following the earnings report and guidance update.
Topics: AI infrastructure Amazon AWS capital expenditures free cash flow