In the second quarter, Amazon Web Services (AWS) generated $42.23 billion in revenue, exceeding the $40.54 billion forecast by analysts from StreetAccount. This growth rate accelerated from 28% in the previous quarter, marking the strongest expansion for AWS since 2021.
The surge in revenue is attributed to the increasing demand for artificial intelligence services and chips, with both segments contributing over $25 billion in annualized revenue, more than doubling from the previous year.
AWS remains the largest player in the cloud computing sector, with a total revenue of $148.40 billion over the past year, compared to Microsoft's Azure, which reported over $100 billion.
Despite Alphabet's Google Cloud showing impressive growth of 82% to nearly $25 billion, analysts from Evercore noted that AWS's consistent performance and profitability—$16.62 billion in operating income and a 36.8% operating margin—reinforce its competitive position.
Amazon's capital expenditures also rose significantly, totaling $54.21 billion, as the company invests heavily in expanding its data centers to meet AI demand. Overall, AWS's strong performance is crucial for Amazon, as it now accounts for nearly 61% of the company's overall operating profit, making it a key driver of Amazon's financial health and growth strategy