Amazon lifts investment after strong cloud sales, shares rise

Amazon lifted its spending plans after AWS posted its fastest growth in 18 quarters, and shares rose as investors treated the results as proof that cloud demand is still paying off. The company said second-quarter net sales increased 20% year over year to $200.6 billion, operating income rose 43% to $27.5 billion, and AWS net sales climbed 37% to a $169 billion annualized revenue run rate.

The cloud division was the clear engine behind the quarter. AWS delivered Amazon’s strongest cloud growth in more than four years, driven by surging enterprise AI spending, and Amazon raised its annual capital spending forecast in the same report. Amazon had already projected $200 billion in capital spending for 2026 in February, and the latest plan was lifted to $220 billion because of higher memory costs, underscoring how much of the bill is being driven by the hardware needed for AI workloads.

That posture keeps Amazon in step with Microsoft and Alphabet in the race to build the next layer of digital infrastructure. Microsoft reported quarterly capital expenditures of $41 billion, while Alphabet said in February that 2026 capital spending could double before later raising its own capex forecast again after a cloud-driven quarterly beat in July. The pattern across the industry is clear: stronger cloud revenue is giving management teams more room to keep spending instead of slowing down.

The stakes extend well beyond quarterly earnings. More data-center construction means more demand for chips, networking gear and land, and it raises the load on electricity systems just as the U.S. Energy Information Administration projected record-high power use in 2026 and 2027 because of AI. For Amazon, the challenge is whether AWS can keep growing fast enough to absorb the higher outlays and protect future profits if memory, power and financing costs keep climbing.