Amazon reported robust results for the second quarter, driven by strong performance in its cloud division and artificial intelligence initiatives. The company’s cloud segment experienced significant expansion, with revenue climbing 37% compared to the same period the previous year, marking the unit’s fastest growth rate since 2021. This performance exceeded Wall Street expectations of 31% growth and reflected substantial demand for the company’s cloud services and AI capabilities.
In response to rising costs and accelerating infrastructure requirements, Amazon substantially increased its capital spending guidance. The company now projects capital expenditures of $220 billion for the year, up from a previous forecast of $200 billion made in February. CEO Andy Jassy attributed the increase primarily to elevated memory prices and indicated that demand for cloud capacity continues to outpace the company’s ability to supply it. Jassy noted that even with the heightened spending level, Amazon would remain unable to fulfill all customer demand during the year, with that dynamic expected to persist into the following year as well.
Amazon’s cloud division demonstrated particular strength across several business lines. The company’s artificial intelligence and proprietary chip divisions, which include the Trainium and Graviton brands, both achieved annual revenue run rates exceeding $25 billion. The AWS backlog, representing contracted work not yet activated, reached $496 billion during the quarter. Capital expenditures during the second quarter alone totaled $54.2 billion, compared with $32.1 billion in the prior-year period.
The company’s heavy investment in infrastructure and AI has impacted its cash flow dynamics. Free cash flow for the trailing twelve-month period swung to a negative $7.6 billion, reversing from a positive inflow of $18.2 billion one year earlier. For the third quarter, Amazon guided for revenue between $197 billion and $202 billion, with operating income expected to range from $22.5 billion to $26.5 billion.
Net income for the second quarter reached $62.6 billion, or $5.75 per share, significantly higher than the $18.2 billion, or $1.68 per share, recorded a year prior. The company attributed a portion of this result to pre-tax income of $53.4 billion derived from its investments in AI laboratory Anthropic. Additionally, Amazon reported substantial growth in its pharmacy operations, more than doubling new customer acquisition and expanding same-day prescription delivery capacity nearly fivefold.
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