Amazon Beats Expectations, AI Business Surges; Shares Jump 15%, Market Cap Nears $3 Trillion
Amazon reported second-quarter 2026 results that beat expectations, with net sales up 20% to $200.6 billion and net income surging 245% to $62.6 billion, boosted by a $53.4 billion gain from its Anthropic investment. AWS operating income rose 64% to $16.6 billion, while advertising revenue grew 26% to $19.81 billion. Shares jumped 15% in a day, lifting market cap to $2.93 trillion.
Amazon reported second-quarter 2026 results on July 30. Net sales totaled $200.6 billion, up 20% from $167.7 billion in the same period last year. Operating income was $27.5 billion, an increase of 43% year over year. Net income reached $62.6 billion, up approximately 245% from $18.2 billion a year earlier. Diluted earnings per share were $5.75.
The quarter's net income included $53.4 billion in non-operating pre-tax income, primarily from the fair value change of its equity investment in artificial intelligence company Anthropic. Amazon Web Services (AWS) contributed the majority of operating profit, with its revenue accounting for roughly one-fifth of total company revenue.
AWS operating income was $16.6 billion, up 64% year over year, with an operating margin of approximately 39%. AWS backlog reached $496 billion, up more than 100% from a year ago. Additionally, annualized revenue from AWS's AI business and its custom chip business each exceeded $25 billion. Amazon's advertising revenue was $19.81 billion, up 26% year over year.
Capital expenditure in the second quarter was $53.1 billion, primarily directed at AWS infrastructure and generative AI investments. Chief Executive Officer Andy Jassy said that even at this spending level, compute supply will not fully meet customer demand in 2026, and a capacity gap will persist in 2027, with a substantial number of orders already locked in for 2028.
Following the earnings release, Amazon shares rose more than 9% in after-hours trading. On July 31, the stock closed up 15.32%, bringing the company's total market capitalization to $2.93 trillion. In the first half of 2026, the number of items delivered to Prime members on the same day or the next day increased more than 40% year over year. Jassy noted on the conference call that approximately 85% of global IT spending is still deployed in on-premises environments, and over the next 10 to 20 years, enterprise cloud migration and the proliferation of AI applications will continue to drive AWS growth.