Amazon Reports Strong Earnings Driven by AWS Growth and Anthropic Investment
Amazon (NASDAQ:AMZN) reported second-quarter earnings that exceeded expectations, with a significant $53.4 billion net income largely attributed to its investment in AI startup Anthropic. The company's stock rose nearly 8% after hours as investors reacted positively to strong performance from Amazon Web Services and the fast-growing AI and chips businesses. AWS saw its fastest quarterly growth in over four years, with revenue up 36.7% year-over-year to $42.2 billion. Despite overall revenue of $200.6 billion for the quarter — a 19.6% increase from last year — Amazon's retail segments showed lower profit margins compared to AWS. The company also announced multi-year agreements with major clients and achieved an annual run rate exceeding $25 billion in its AI business. However, increased investment in AI infrastructure has strained Amazon’s cash flow, resulting in negative free cash flow of -$7.6 billion for the trailing 12 months compared to a positive $18.2 billion at the end of Q2 2025. CEO Andy Jassy remains confident about capital expenditures and long-term growth.
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Topics: AI Amazon AWS Earnings Report Nvidia