Amazon (NASDAQ: AMZN) Q2 2026: AWS Hits $169B Run Rate as Operating Income Jumps 43%

Amazon.com (NASDAQ: AMZN) reported Q2 2026 net sales of $200.6 billion, up 19.6% year over year, while operating income grew at a faster 43.2% clip to $27.5 billion, expanding GAAP operating margin by 2.3 percentage points to 13.7%. Adjusted EPS of $1.88 edged past the $1.86 consensus estimate, while GAAP net income of $62.6 billion, or $5.75 per diluted share, reflected $53.4 billion in non-operating pre-tax income primarily from the company's investment in AI startup Anthropic.

Q2 2026 Results

• Net sales: $200.6 billion, up 19.6% from $167.7 billion in Q2 2025, with North America segment sales rising 16% to $116.2 billion and International segment sales up 15% to $42.2 billion.
• AWS net sales: $42.2 billion, up 37% year over year, reaching a $169 billion annualized revenue run rate and marking the segment's fastest growth rate in 18 quarters.
• Operating income: $27.5 billion, up from $19.2 billion a year ago; AWS segment operating income of $16.6 billion rose 62.7% from $10.2 billion in Q2 2025.
• GAAP net income: $62.6 billion ($5.75 diluted EPS), up from $18.2 billion ($1.68 diluted EPS) in Q2 2025, a 244.0% year-over-year increase driven by Anthropic investment gains.
• Adjusted EPS: $1.88, beating the $1.86 consensus estimate by approximately 1.3%.

What Drove the Results

Adjusted EPS of $1.88 beat the $1.86 consensus by $0.02. Revenue of $200.6 billion grew 19.6% year over year. The GAAP net income figure of $62.6 billion diverges sharply from the adjusted $1.88 EPS figure because it includes $53.4 billion in non-operating pre-tax income tied to Amazon's Anthropic investment, which the company disclosed explicitly in its earnings release.

AWS was the primary engine of operating leverage. The cloud segment contributed $16.6 billion in operating income, up from $10.2 billion a year ago, and accounted for the bulk of total company operating income of $27.5 billion. Amazon noted that its AI business and its custom chips business each exceeded $25 billion annual revenue run rates, both growing at triple-digit percentages year over year. Advertising revenue grew 26% year over year, and CEO Andy Jassy noted that Prime delivery speeds hit record levels in H1 2026, with over 40% more items delivered same-day or overnight compared to the prior year.

Capital expenditure intensity remained elevated. Free cash flow turned negative, to an outflow of $7.6 billion for the trailing twelve months, compared to an inflow of $18.2 billion in the prior-year period. The company attributed the shift to a $66.1 billion year-over-year increase in property and equipment purchases, primarily reflecting AI infrastructure investment. Operating cash flow for the trailing twelve months grew 33% to $161.4 billion.

Wall Street View

Analyst sentiment heading into the print was skewed heavily positive, with the majority of covering firms carrying Buy or equivalent ratings. Amazon's Q2 results provided concrete validation of AWS reacceleration, a narrative that had been building through 2025 and into 2026. The company did not provide explicit numerical guidance for Q3 2026 or the full year, though management pointed to continued growth in AI, custom chips, advertising, and grocery and everyday essentials in the second half of 2026.

Investor Takeaway

The operational story in this quarter is the combination of AWS reacceleration to 37% growth and expanding company-wide operating margins, which reached 13.7% versus 11.4% a year ago. The free cash flow swing to a $7.6 billion outflow is the key forward-looking risk to monitor: Amazon is absorbing a $66.1 billion year-over-year increase in capital expenditures to build AI infrastructure, and the payoff timeline for that spending will determine whether margin expansion can continue even as AWS revenue scales. Shares gained 3.90% on Thursday, July 30, 2026, while the S&P 500 rose 1.68%.