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Amazon reports 37% AWS sales growth as Microsoft, Alphabet also post strong cloud gains

Amazon reports 37% AWS sales growth as Microsoft, Alphabet also post strong cloud gains

AWS revenue reached $42.2 billion in the second quarter as Amazon said customers are shifting more workloads to the cloud and layering AI services on top, helping accelerate demand for Bedrock and core infrastructure.

Fact Check
Amazon's official Q2 2026 earnings release ('Amazon.com Announces Second Quarter Results') directly confirms AWS net sales grew 37% YoY, and the disclosed sequential growth trend (17%, 17%, 20%, 24%, 28%, 37%) supports the 'fifth straight acceleration.' Reuters confirms this is AWS's fastest growth in 18 quarters (i.e., since 2022) and that AI demand drove it. CNBC confirms the 37% figure and large capex spending. All headline claim elements are corroborated by the primary source and independent reporting.
    Reference: 123
Summary

Amazon Web Services revenue rose 37.6% from a year earlier to $42.2 billion in the second quarter, its fastest growth rate in 18 quarters, as Amazon said customers are moving existing infrastructure into the cloud and then building AI services on top of those workloads. The results strengthened the case that artificial intelligence demand is sustaining heavy cloud spending and broader infrastructure investment across the sector. AWS added more than $4.6 billion in revenue sequentially, customer backlog reached $496 billion, and the business is running at a $169 billion annualized rate. Amazon CEO Andy Jassy told investors that roughly 85% of global IT spending still sits on on-premise servers but said that balance is likely to reverse over the next 10 to 20 years. He also said AWS could “very possibly be a $1 trillion annual revenue business for us in time,” even as Amazon raised its 2026 capital expenditure forecast to $220 billion from $200 billion. Amazon said Bedrock, its service for deploying foundation models, is benefiting from that shift. Customers spent more on Bedrock in the second quarter than in every prior quarter combined since its 2023 launch, more customers joined in the past six months than in the first two years, and AWS’ AI business has exceeded a $25 billion annual revenue run rate. The PGA Tour, an AWS customer, said it has moved systems including ShotLink to AWS and now uses Bedrock for betting profiles, AI-generated commentary and other fan-facing content. Microsoft said fiscal 2026 fourth-quarter revenue rose 18% to $90.007 billion, with Azure growth accelerating to 43%. Alphabet said Google Cloud revenue jumped 82% to $24.8 billion and that it, like Amazon, raised capital spending plans. Amazon’s stronger-than-expected earnings also drove its shares sharply higher, with the stock up more than 15% on Friday.

Terms & Concepts
  • on-premise servers: Company-owned computing systems that are installed and operated in an organization’s own facilities rather than in the cloud.
  • Bedrock: AWS service for deploying foundation models and building generative AI applications.
  • AI inference: The process of running a trained AI model to generate outputs such as predictions, summaries or responses.