Amazon's Q2 Earnings Exceed Expectations, Driven by Strong AWS Growth
Amazon reported strong second-quarter earnings that exceeded Wall Street expectations across all key metrics. The company achieved a net sales increase of $32.9 billion year-over-year to reach $200.6 billion and saw operating income rise 43% to $27.5 billion, with an improved margin from 11.4% to 13.7%. Amazon Web Services (AWS) grew by 37%, its fastest pace in nearly five years, reaching annualized sales of $169 billion and contributing significantly to the company's profitability. The AI segment was a major driver behind this success, with AWS operating income jumping 64% to $16.6 billion as Amazon’s in-house Trainium chips gained traction among leading AI labs like Anthropic and OpenAI. However, capital expenditures surged by 64%, reaching $54.2 billion for the quarter alone, which caused free cash flow to turn negative at -$7.6 billion over the trailing twelve months. Looking ahead, Amazon provided third-quarter sales guidance of between $197 billion and $202 billion—slightly below analyst expectations due in part to timing shifts around Prime Day.
Topics: AI Amazon AWS Earnings Beat Stock Reaction