Amazon’s share price climbed about 15% to roughly $270 on Friday after the company reported faster cloud growth, higher operating profit and quarterly revenue above Wall Street forecasts. The rally put the stock on course for its strongest one-day gain in more than a decade.
The move followed Amazon’s second-quarter report, which showed that net sales rose 20% from a year earlier to $200.6 billion. Operating income increased 43% to $27.5 billion. Amazon Web Services, the company’s cloud division, recorded a 37% increase in sales to $42.2 billion, its fastest growth rate in 18 quarters.
AWS growth changes the Amazon share price debate
Investors had been waiting for evidence that Amazon’s heavy spending on artificial intelligence infrastructure was producing faster growth. The latest AWS figures offered that evidence.
AWS operating income rose to $16.6 billion from $10.2 billion a year earlier. The division produced about 61% of Amazon’s total operating income during the quarter, despite accounting for roughly one-fifth of company revenue.
Amazon Chief Executive Andy Jassy said AWS was “booming,” while the company reported that its AI and chip businesses had each passed annual revenue run rates of $25 billion.
The results also exceeded market forecasts. Analysts had expected Amazon to report about $196.8 billion to $197 billion in quarterly revenue.
Anthropic gain lifts Amazon earnings per share
Amazon reported net income of $62.6 billion, or $5.75 per diluted share, compared with $18.2 billion, or $1.68 per share, a year earlier.
The headline profit figure needs context. Amazon said the quarter included $53.4 billion in pre-tax non-operating income, mainly from its investment in Anthropic. That accounting gain means the earnings-per-share result does not reflect the operating business alone.
The operating figures were still strong. North American sales rose 16% to $116.2 billion, while international sales increased 15% to $42.2 billion. Advertising revenue grew 26%, according to the company.
Higher AI spending remains the main risk
Amazon raised its expected 2026 capital spending to $220 billion, up from its previous $200 billion plan. The company is spending on data centers, AI chips, robotics and satellite infrastructure. The Wall Street Journal also reported the revised spending forecast after the earnings call.
The investment is putting pressure on cash flow. Amazon spent $54.2 billion on property and equipment during the second quarter. Free cash flow for the trailing 12 months shifted to an outflow of $7.6 billion, compared with an inflow of $18.2 billion a year earlier.
Jassy said Amazon still expects demand to exceed available capacity, even after the higher spending plan. That helps explain why investors accepted the added cost after the earnings release. The market response may change if AWS growth slows or the spending fails to produce adequate returns.
Third-quarter guidance sets the next test
Amazon expects third-quarter net sales of $197 billion to $202 billion, representing growth of 9% to 12% from a year earlier. It forecast operating income of $22.5 billion to $26.5 billion, compared with $17.4 billion in the third quarter of 2025.
The sales range was below the $203.9 billion analyst estimate cited by The Associated Press. Investors will therefore watch whether AWS growth and operating margins can offset softer consolidated revenue guidance.
For the Amazon share price, the next tests are clear: continued AWS acceleration, returns from the $220 billion investment program and a recovery in free cash flow. Friday’s rally shows that investors are willing to support high AI spending when cloud revenue and profit rise fast enough to justify it.
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