Amazon earnings turned on a 37% jump in Amazon Web Services revenue to $42.2 billion in the second quarter ended June 30. The growth beat market expectations and sent Amazon shares up more than 9% after the market's close, easing pressure on investors who had been focused on artificial intelligence spending.
Andy Jassy and AWS
37% was the growth rate Andy Jassy used to describe the quarter's cloud business, and he said in a statement that “AWS is booming,” adding that it was the unit's fastest growth in 18 quarters. He also said, “Our AI and chips businesses each eclipsed run rates of more than $25 billion.”
31.21% had been the consensus estimate for Amazon Web Services revenue growth, so the result came in ahead of what Wall Street was modeling. Amazon shares also rose 3.9% during the trading session before the after-hours jump, showing that the cloud print mattered before the stock reacted again.
Amazon Web Services Cash Burn
$7.6 billion was the amount Amazon said it burned on a trailing 12-month basis in the second quarter, compared with $18.2 billion in free cash flow a year earlier. That gap shows how much cash the company is directing into AI and chip capacity even as AWS keeps expanding, a split that investors have been weighing against the faster cloud growth.
26% was the increase in ad sales, which reached $19.8 billion in the quarter and added another source of operating strength alongside the cloud unit. Amazon also held its annual Prime Day event from June 23 through June 26, a period when Adobe Analytics estimated total Prime Day spending at over $26.4 billion.
Amazon Earnings After Hours
More than 9% was the size of the after-hours stock move, a reaction that suggests the cloud result did more than meet a headline number. The next issue for shareholders is whether AWS can keep that pace as more data center capacity comes online, because the company is still spending heavily to support AI demand while cash generation has swung sharply from last year.
