Amazon joins Microsoft in silencing the AI spending doubters

@amazon has delivered a quarter that goes some way to ending the debate over whether the AI spending boom is actually paying off. Total net sales for the second quarter of 2026 reached $200.6 billion, up 20% from $167.7 billion a year earlier, marking the first time the company has ever crossed the $200 billion threshold in a single quarter. The result comfortably beat analyst expectations of roughly $196.5 billion.

AWS accelerates to its fastest growth since 2021

The standout number was Amazon Web Services. Amazon's cloud segment grew nearly 37% year over year, its strongest expansion since 2021, with AWS generating $42.23 billion in revenue during the quarter. That trounced analyst expectations for 31% growth. The growth rate accelerated from 28% in the first quarter.

"AWS is booming, growing 36.7% year-over-year in Q2 ... and our AI and Chips businesses each eclipsed run rates of more than $25 billion," Amazon President and CEO Andy Jassy said. Amazon has increasingly looked to highlight its in-house chips division, which includes the Trainium and Graviton brands, as a newer growth pillar. On the platform side, Bedrock added models from OpenAI, Anthropic, and Google DeepMind in the same quarter, broadening its AI model marketplace.

Amazon's advertising services revenue also grew 26% year over year to $19.8 billion, notching its best growth in years. AWS collected $16.62 billion in operating income, well above the Street's $13.62 billion consensus, and nearly 61% of Amazon's overall operating profit now comes from the cloud unit.

$AMZN, already up roughly 3.9% heading into the close, spiked further in after-hours trading. The stock shot up more than 10% in extended trading. Capital spending also came in above expectations: CEO Andy Jassy said the company now expects capital spending to reach $220 billion this year.

Back-to-back proof from the two biggest clouds

The timing of the report adds broader significance. Microsoft's Azure cloud revenue rose 43% during its fiscal fourth quarter, reported just a day earlier. Together, the two results offer consecutive data points that the trillion-dollar AI infrastructure buildout is converting into real revenue growth, not just capital commitments.

Skeptics have long questioned whether surging data centre investment would translate into proportionate returns. For now, Amazon and Microsoft have provided the clearest answer yet: the demand is real, the workloads are growing, and the spending is starting to show up in the numbers.

Sources:
CNBC: Amazon Q2 2026 earnings report
Yahoo Finance: Amazon Q2 2026 earnings, AWS grows 37%