Amazon Web Services (AWS), Amazon’s cloud computing division, reported $42.2 billion in Q2 2026 revenue, up 37% from a year earlier and marking its fastest growth rate in 18 quarters, or roughly four and a half years. The result exceeded analyst expectations of about 31% growth and consensus revenue of roughly $40.5 billion. AWS reached a $169 billion annualized revenue rate, while operating income rose 64% to $16.6 billion and operating margins reached 39.4%. The division now generates more than 60% of Amazon’s total operating income. Amazon’s overall Q2 net sales increased 20% year over year to $200.6 billion, and total operating income rose 43% to $27.5 billion. AWS growth accelerated from 28% in Q1, when revenue was $37.6 billion. Amazon CEO Andy Jassy said AWS would rank among the top 25 U.S. companies by revenue if it were independent. The company’s custom chips business, including Trainium and Inferentia processors, and its broader AI services each exceeded a $25 billion annual run rate. Amazon raised its full-year capital expenditure outlook to finance additional AI infrastructure, contributing to negative trailing-twelve-month free cash flow despite healthy operating cash flow.