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Amazon Exceeds Expectations with Robust Growth in Cloud Computing and AI Sectors

Amazon has reported significant revenue growth, particularly in its cloud and AI divisions, surpassing analyst expectations.

By Staff Correspondent
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Amazon beats expectations with cloud and AI growth | Business
BSS

Amazon has reported impressive revenue growth, surpassing analysts' expectations, driven by significant increases in its cloud and artificial intelligence divisions. The company's overall revenue increased by 20 percent to over $200 billion in the second quarter, with its cloud business, Amazon Web Services (AWS), jumping 37 percent to reach $42.2 billion. Additionally, Amazon's AI-related divisions, including AI cloud and chips businesses, grew by triple-digit percentages, each exceeding $25 billion in annual revenue run rates.

AWS Booming

During a call with analysts, Amazon CEO Andy Jassy highlighted that AWS is "booming" and could potentially become a trillion-dollar annual revenue business in the future. AWS offers customers access to dozens of AI models from various developers, including those from OpenAI and Anthropic. Some AWS customers are using the service to build their own foundation models, leveraging proprietary data.

Heavy Investments in AI

Amazon, along with other tech giants like Microsoft, Alphabet, and Meta, is heavily investing in AI data centers, chips, and computing infrastructure. This year, these companies are collectively expected to invest around $700 billion in AI. Amazon increased its estimate for capital expenditures in 2026 to $220 billion, up from its previous estimate of $200 billion.

Market Reactions

Following the announcement, Amazon's stock jumped by more than 7 percent after hours. In comparison, Microsoft's stock soared over 15 percent after it reported strong results, while Meta's shares dropped as much as 12 percent during after-hours trading due to disappointing results.

Source: BSS

FAQ

What drove Amazon's revenue growth?
The growth was driven by significant increases in its cloud and AI divisions.
How much did AWS revenue increase?
AWS revenue increased by 37 percent to $42.2 billion.

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