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Amazon posts first 200-billion-dollar quarter as AWS accelerates to 37% growth

· by Pondero Newsdesk

The short version

Amazon reported Q2 2026 net sales of $200.6 billion, crossing $200 billion for the first time, while AWS hit $42.2 billion in revenue, its fastest year-over-year growth pace in 18 quarters. Full-year capex guidance rose to $220 billion as Andy Jassy said capacity will remain short of demand through 2027.

Amazon posts first 200-billion-dollar quarter as AWS accelerates to 37% growth

Amazon reported Q2 2026 net sales of $200.6 billion on July 30, crossing $200 billion in a single quarter for the first time, while AWS hit 36.7% year-over-year revenue growth, its fastest pace in 18 quarters.

What Amazon reported

Net sales rose 20% from $167.7 billion in Q2 2025 to $200.6 billion, per Amazon's Q2 press release. Operating income reached $27.5 billion, up 43% year-over-year. AWS generated $42.2 billion in revenue with $16.6 billion in operating income and a 39.4% operating margin. Amazon's reported net income of $62.6 billion, or $5.75 per diluted share, included $53.4 billion in non-operating gains from its Anthropic investments; the underlying operating income of $27.5 billion captures core business performance.

CEO Andy Jassy said both the AWS AI business and the Trainium and Graviton custom-chip business each surpassed $25 billion in annualized revenue, both growing at triple-digit rates, per the press release. AWS's signed customer backlog reached $496 billion, per the earnings call transcript. Advertising revenue came in at $19.8 billion, up 26% year-over-year.

Amazon raised its full-year 2026 capital expenditure guidance to approximately $220 billion, up from approximately $200 billion, citing higher memory costs driven by AI infrastructure demand, per the earnings call. Q2 capital spending alone reached $53.1 billion. Jassy told analysts that even at the raised level Amazon "will still not have enough capacity to meet all the demand we have in 2026," and described the same constraint persisting into 2027.

For Q3 2026, Amazon guided net sales of $197 to $202 billion and operating income of $22.5 to $26.5 billion, noting a roughly 400 basis-point headwind from Prime Day shifting into Q2 this year.

Why it matters

The supply constraint signal is the most actionable figure for operators. Jassy's statement that $220 billion in annual capex will still leave AWS short on capacity through 2027 means compute reservation commitments are worth pricing in now, not later. Teams running large AI workloads on AWS who have not locked in reserved or savings-plan pricing face a tighter spot market than the headline cloud-growth figures suggest.

The $496 billion backlog reflects the scale of enterprise commitments already signed, providing a revenue floor that extends well beyond the next few quarters. Within Bedrock, Amazon noted that more customers joined in the last six months than in the first two years since launch, and customers spent more in Q2 alone than in all prior quarters combined, per the press release. That buy-in pace shapes where model providers and tooling vendors will concentrate their deepest integrations.

AWS's chip business crossing $25 billion annually is separately notable. Trainium and Graviton now represent a viable compute alternative to third-party GPU supply, and the growth rate suggests actual customer adoption, not just pilot workloads.

What to watch next

NVIDIA reports Q2 FY2027 earnings on August 26. The result will confirm or complicate Amazon's picture of AI chip demand heading into the second half of 2026. Azure and Google Cloud report within the next three weeks; their year-over-year growth rates measured against AWS's 37% will signal whether Amazon is riding a sector tailwind or capturing share.

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