Amazon’s Earnings Recast the AI Spending Debate as Strong Returns Support Massive Investment
Amazon’s second-quarter earnings report provided fresh support for its massive investment in AI infrastructure. AWS revenue rose 36.7% year over year to $42.2 billion, marking the division’s fastest growth in 18 quarters. Amazon’s total net sales reached $200.6 billion, up 20% from a year earlier, while operating income rose 43% to $27.5 billion. A $53.4 billion pretax non-operating gain related to Anthropic investment drove net income to $62.6 billion for the quarter. Diluted earnings per share reached $5.75. More importantly, annualized revenue from both Amazon’s AI business and its proprietary chip business has surpassed $25 billion, with growth in the triple digits. Although high capital spending pushed free cash flow for the past 12 months to negative $7.6 billion, investors reacted positively this time. Amazon’s stock rose as much as 8% in after-hours trading. A Morningstar analyst said AWS’s accelerating growth clearly supports management’s large-scale capital investment plan.
Amazon’s total net sales reached $200.6 billion, up 20% from a year earlier, while operating income rose 43% to $27.5 billion.
A $53.4 billion pretax non-operating gain related to Anthropic investment drove net income to $62.6 billion for the quarter. Diluted earnings per share reached $5.75.
More importantly, annualized revenue from both Amazon’s AI business and its proprietary chip business has surpassed $25 billion, with growth in the triple digits.
Although high capital spending pushed free cash flow for the past 12 months to negative $7.6 billion, investors reacted positively this time. Amazon’s stock rose as much as 8% in after-hours trading.
A Morningstar analyst said AWS’s accelerating growth clearly supports management’s large-scale capital investment plan.