Amazon's AI investments pay off... AWS growth of 37% sends shares up 6% after hours

[Financial News, New York = Reporter Lee Byung-chul]Amazon eased market concerns over its artificial intelligence investments with strong cloud results. Fueled by AI demand, Amazon Web Services (AWS), the company's core business, posted its fastest growth since 2022. Amazon also kept its $200 billion AI investment plan unchanged, which had drawn close market attention. Unlike Alphabet Inc. and Meta Platforms, whose shares tumbled under the burden of massive AI spending, Amazon is being credited with proving that its AI investments are translating into real earnings growth.
On the 30th local time, Amazon said AWS revenue in the second quarter rose 37% from a year earlier. That was the highest growth rate since 2022. AWS is Amazon's biggest source of profit and provides cloud services needed to train and run AI models for major AI companies such as OpenAI and Anthropic.
Total revenue for the second quarter rose 20% year on year to $200.6 billion, while net income increased to $62.2 billion. Both figures beat Wall Street expectations. After the earnings release, Amazon shares rose more than 6% in after-hours trading.
Market attention was focused less on earnings than on whether Amazon would continue its AI spending. The company said it would maintain this year's capital expenditure plan of about $200 billion. Most of the investment will go toward AI data centers and expanded cloud infrastructure.
On Wall Street, views on Big Tech's AI spending have been changing rapidly. Investors are now paying more attention to whether those investments are actually generating returns, rather than simply how large they are.
Meta Platforms saw its shares plunge 9% after it said free cash flow fell below $1 billion and it expanded its capital spending plan, while failing to present a new roadmap for monetizing AI. Alphabet Inc. also dropped more than 7% after it raised its capital expenditure outlook for this year and reported that free cash flow had turned negative for the first time since its listing.
By contrast, Amazon's accelerated AWS growth alongside expanded AI investment has eased much of the market's concern.
Amazon Chief Executive Officer Andy Jassy stressed in a letter to shareholders this year that "we are not investing about $200 billion in 2026 simply because of speculation." He explained that the company is continuing large-scale investment because AI demand has been clearly confirmed.



[email protected] Reporter Lee Byung-chul Reporter