Amazon stock jumps 10% as AWS revenue hits $42 billion

Amazon shares surged nearly 10% in after-hours trading on July 30, 2026, after the company reported a 37% jump in AWS revenue to $42 billion. It also raised its 2026 capital expenditure forecast to $220 billion, up from $200 billion.

Net sales rose 20% in the second quarter, underscoring broad momentum.

Capital spending on property and equipment hit $173 billion for the fiscal year ended June 30, 2026, up from $107.65 billion a year earlier, as the company pours resources into AI data centers.

Amazon disclosed its first period of negative free cash flow in 2026, ending the quarter with $7.6 billion less cash than a year earlier.

Investors cheered cloud earnings broadly: Microsoft and Google also gained after posting strong cloud numbers, while Meta’s stock fell 8% as investors balked at its cash-flow squeeze and heavy AI investment with no visible payoff.

CEO Andy Jassy said on the earnings call that the AI business is following a margin path similar to the core business, and that AWS and Amazon Bedrock can succeed without its own frontier model because no single model will dominate.

The company is also betting heavily on custom chips such as the Trainium TPU and Arm-based Graviton processor, which do not show up in capex but can meaningfully improve cloud margins.

Cloud revenue is closely tied to AI labs and startups. Anthropic’s spending, for instance, flows directly to Amazon’s cloud.

Still, analysts caution that if AI demand sours, the revenue for cloud hosts could wobble, reviving David Cahn’s $3 trillion question of whether enough demand exists to justify the infrastructure buildout.