Amazon lifts 2026 spending outlook as AWS growth beats estimates

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Amazon lifts 2026 spending outlook

Highlights

Amazon reports Q2 revenue of $200.61 billion and net income of $62.6 billion, beating forecasts, with EPS at $5.75 versus $1.68 last year.
Amazon raises 2026 capital expenditure guidance to $220 billion from $200 billion due to higher memory prices and increased AI capacity buildout.
AWS revenue grows 37% year-over-year to $42.2 billion, AWS backlog reaches $496 billion, and shares jump over 10% on cloud and AI momentum.

Quarterly results and spending outlook

As reported by CNBC, Amazon says second-quarter revenue reaches $200.61 billion, above the $196.47 billion expected by analysts polled by LSEG, while earnings per share come in at $5.75. Net income for the quarter is $62.6 billion, or $5.75 per share, compared with $18.2 billion, or $1.68 per share, a year earlier.

The company says it now expects capital expenditures to reach $220 billion this year, up from the $200 billion forecast it gave in February and maintained in April. CEO Andy Jassy says higher memory prices are pushing the estimate upward, and he indicates the investment cycle is unlikely to slow as Amazon builds more artificial intelligence capacity.

For the current quarter, Amazon guides for revenue between $197 billion and $202 billion. That range is below the $204.1 billion analysts were expecting, even as the broader quarterly results exceed market forecasts.

AWS demand drives market reaction

Amazon Web Services revenue rises 37% from a year earlier to $42.2 billion, ahead of the $40.54 billion expected according to StreetAccount. The performance exceeds Wall Street expectations for 31% growth and marks the cloud unit's fastest expansion since 2021, according to Jassy.

Jassy tells investors that Amazon still does not have enough capacity to meet all demand in 2026, and he says the same dynamic is likely to continue into 2027. He adds that AWS backlog, representing contracted work not yet online, reaches $496 billion during the quarter, underscoring the scale of future cloud demand.

Other business lines also top estimates, with advertising revenue reaching $19.81 billion versus the $19.43 billion expected, according to StreetAccount. Investors respond positively to the cloud acceleration and AI-linked spending plans, sending the stock up more than 10% in extended trading.

Amazon’s AWS-driven rally after its June-quarter results was the focus of our earlier coverage, as the cloud unit’s 37% sales growth beat expectations and lifted the stock in after-hours trading. We also noted that Amazon’s aggressive AI and data-center investment cycle was pushing capex higher and raising market questions about funding needs and free cash flow.

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