Amazon's Strong AWS Performance Outpaces Meta Amid AI Spending Concerns
Amazon reported robust second-quarter earnings driven by a significant increase in revenue from its cloud computing division, Amazon Web Services (AWS). The company’s shares rose as much as 9% after hours following the results. AWS revenue surged 37% year-over-year to $42.2 billion, marking five consecutive quarters of accelerating growth and the fastest rate in nearly four years. Investors were particularly encouraged by Amazon's AI-related businesses, which both exceeded $25 billion annual run rates with triple-digit growth compared to last year. CEO Andy Jassy raised capital expenditure guidance for 2026 to $220 billion—higher than Meta and Microsoft but in line with Google’s recent increase. The strong performance contrasted sharply with Meta's nearly 8% drop after it increased its capex forecast, while Microsoft saw a significant rise following stable spending forecasts. Amazon is also expanding into AI chip manufacturing, with Trainium chips being adopted by Anthropic and OpenAI. Meanwhile, the company has reportedly closed its Artificial General Intelligence lab but plans to launch a new frontier model later this year.
Topics: AI investments Amazon earnings AWS Meta performance contrast