Amazon's shares rose 11% following a second-quarter earnings report that exceeded revenue expectations, driven by a 37% year-over-year growth in its cloud division, Amazon Web Services (AWS), surpassing analyst estimates of 31%. CEO Andy Jassy highlighted that AWS growth is at its fastest pace since 2021, with a backlog reaching $496 billion.
Analysts responded positively, raising price targets and maintaining buy ratings, citing AWS's re-acceleration and expanding margins. Canaccord Genuity's Maria Ripps noted that demand is outpacing capacity, while Bernstein's Mark Shmulik stated that AWS has reached a growth inflection point.
Despite slightly weaker revenue guidance for the current quarter, Amazon's capital expenditures were higher than expected, reflecting a commitment to long-term growth. Analysts from various firms, including Bank of America and UBS, emphasized the strong returns expected from Amazon's investments in AI and cloud infrastructure, with projections for AWS growth of around 39% year-over-year into 2026.
Overall, Amazon's performance has reassured investors about its strategic positioning in the competitive AI cloud market