Amazon topped Q2 expectations with revenue of $200.61 billion versus $196.47 billion expected and AWS revenue of $42.2 billion, up 37% year over year versus 31% expected, driving the stock about 9.55% higher after hours to roughly $258. The company raised annual capital expenditure to about $220 billion, spent $54.2 billion in the quarter and warned of capacity constraints through 2027, a development that boosts cloud and AI infrastructure funding relevant to crypto, DeFi and CEX operators and token projects while underscoring security and uptime risks from AWS outages.

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Amazon stock surged in extended trading after the company reported stronger-than-expected second-quarter results, driven by growth in its cloud computing business and rising demand for artificial intelligence infrastructure.

Amazon shares closed the July 30 trading session at $235.50, up 3.90% from the previous close of $226.65. The rally accelerated after the earnings release, with the stock gaining another 9.55% to approximately $258 in after-hours trading.

Amazon stock price (Source: Google Finance)

AWS Revenue Beats Expectations

Amazon reported quarterly revenue of $200.61 billion, exceeding the $196.47 billion expected by analysts surveyed by LSEG.

Amazon Web Services generated $42.2 billion in revenue, which was also above Wall Street’s estimate of $40.54 billion. AWS revenue increased 37% year over year, much faster than the 31% growth analysts expected and the division’s strongest growth rate since 2021. Advertising revenue also exceeded expectations after reaching $19.81 billion compared with an estimated $19.43 billion.

The strong AWS performance suggests that businesses are increasing their spending on cloud computing and AI infrastructure. CEO Andy Jassy said Amazon still does not have enough capacity to meet expected demand in 2026 and may continue facing capacity constraints through 2027.

Amazon Raises AI Spending Forecast

Amazon increased its projected capital expenditure for the year from $200 billion to approximately $220 billion. The company spent $54.2 billion during the June quarter, up from $32.1 billion a year earlier.

The additional spending will support data centers, servers, AI chips and other cloud infrastructure. However, the investment program has placed some pressure on cash flow. Amazon recorded a trailing 12-month free cash outflow of $7.6 billion, compared with an inflow of $18.2 billion during the previous year.

For the third quarter, Amazon expects revenue of between $197 billion and $202 billion, which is below analysts’ estimate of $204.1 billion. The company attributed part of the weaker outlook to moving Prime Day from July to June.

Despite the cautious guidance and high spending, Amazon stock rallied because investors are still more focused on accelerating AWS growth and strong long-term demand for AI infrastructure.

Read the article at Coinpaper