Amazon (AMZN) Posts Strong Q2 Beat Driven by AWS +37% Growth
Key Takeaways
- Revenue beat: Amazon reported $200.61 billion in net sales, up 19.6% year-over-year and ahead of the consensus estimate of approximately $197 billion.
- GAAP earnings surge: Earnings per share (EPS) came in at $5.75, far exceeding the $1.82 consensus, driven largely by a $53.4 billion non-operating gain linked to Amazon's investment in AI startup Anthropic.
- AWS acceleration: Amazon Web Services (AWS) revenue jumped 37% year-over-year to $42.2 billion — the segment's fastest growth in 18 quarters — while AWS operating income rose to $16.6 billion.
- Advertising momentum: The advertising business posted 26% year-over-year growth, reinforcing its role as a high-margin revenue stream within the broader e-commerce ecosystem.
- Q3 guidance mixed: Amazon guided third-quarter revenue to a range of $197 billion to $202 billion, below the Street's $204 billion forecast, while operating income guidance of $22.5–$26.5 billion bracketed consensus.
- Stock rallies after hours: Shares rose more than 7% in after-hours trading as investors cheered AWS acceleration and AI momentum despite a softer-than-expected top-line outlook.
Why This Report Matters Right Now
Amazon released its second-quarter results at a time when investor focus on AI spending was especially intense. Reports from Alphabet and Tesla had already highlighted rising capital expenditure concerns, leaving the market sensitive to any signs that big infrastructure bets might not pay off quickly. AMZN shares had fallen about 11% over the previous three months and were essentially flat year-to-date. The key question was not whether the company could grow, but whether its roughly $200 billion in planned 2026 capex—particularly in data centers and custom AI chips like Trainium—would translate into faster, profitable revenue.
The Quarter in Detail
Net sales reached $200.61 billion, up 19.6% from $167.7 billion a year earlier and above the roughly $197 billion consensus. GAAP EPS of $5.75 easily beat the $1.82 estimate, though most of the outperformance came from a $53.4 billion non-operating pre-tax gain tied to the valuation of Amazon’s stake in Anthropic. Stripping that out, operating income still rose to $27.5 billion from $19.2 billion.
Segment results showed clear strength where it counts. AWS revenue climbed 37% to $42.2 billion—its quickest pace in 18 quarters—and topped the $40.5 billion expected. Operating income in the segment reached $16.6 billion versus $10.2 billion last year. North American sales grew 16% to $116.2 billion, while International sales rose 15% to $42.2 billion. CEO Andy Jassy noted that both the AI and custom chips businesses have now surpassed a $25 billion annualized run rate, indicating that years of infrastructure investment are starting to produce visible top-line results. I also checked this using Tickeron’s AI Screener to see how AMZN stacks up against other cloud and AI names on key growth metrics.
How the Market Responded
Shares climbed more than 7% in after-hours trading. The move reflected relief around the AWS acceleration and confirmation that AI-related businesses are reaching commercial scale. The $25 billion run-rate figure addressed concerns that heavy spending lacked a clear return timeline. Guidance for the third quarter tempered some of the enthusiasm, however. Revenue is expected between $197 billion and $202 billion against a consensus near $204 billion. Management pointed out that a shift in Prime Day timing between the two years makes underlying growth look nearly 400 basis points stronger, suggesting the headline miss is partly calendar-related rather than a sign of slowing demand.
What to Watch Going Forward
Several factors will determine how the story unfolds through the rest of 2026. The sustainability of the 37% AWS growth rate remains the biggest variable and will depend on enterprise adoption of AI workloads plus competition with Microsoft Azure and Google Cloud. Demand from large AI customers such as Anthropic and OpenAI will be closely monitored.
Capex efficiency is another focus. With the largest spending plan among hyperscalers, investors want clear evidence that each dollar is generating high-margin recurring revenue. Third-quarter operating income guidance of $22.5 billion to $26.5 billion implies continued leverage, though the midpoint sits close to expectations.
On the retail side, Prime Day timing effects will complicate comparisons, but underlying trends in North America and International—especially around delivery improvements and everyday essentials—should give a cleaner read on consumer health. Advertising’s 26% growth rate also merits attention as a high-margin complement to AWS profitability. Foreign-exchange headwinds of about 80 basis points in the third quarter add another layer to watch.
My Take on Research Tools
When I review earnings releases like this one, I often run quick scans with Tickeron’s AI Screener to compare growth rates, margins, and technical signals across the cloud and AI sectors. It helps me put single-company results into broader context without spending hours on manual screens.
Disclaimer
The information on this webpage is provided for general informational and educational purposes only and is not intended as investment advice, a recommendation to purchase or sell any security, or an offer or solicitation related to investments. It does not consider your personal financial situation, goals, or risk profile, and all investing carries inherent risks, including the possibility of losing your entire investment. For more details, please review our full disclaimer.
Contributor
Sergey Savastiouk, Ph.D. has a degree in Applied Mathematics from Moscow University and has extensive experience as an entrepreneur, investor, manager, and mathematician. His professional expertise is in applied mathematics, mathematical modeling, system and pattern analysis, and software and hardware system integration. He has served as the CEO of several hi-tech start-up companies and nonprofit organizations, which has given him proven capabilities in business strategy for high-tech start-up companies, market assessment, company formation, team building, product development, marketing, and sales. He has published numerous articles in journals and magazines on related fields. As a retail investor, he spent 15 years developing his proprietary trading and quantitative algorithms (now Tickeron’s A.I.), which brought him significant returns in trading the stock market. His current work and goal in founding Tickeron is to bring professional, sophisticated stock market analysis capabilities to retail investors via an easy-to-use interface.
AMZN sees its Stochastic Oscillator ascends from oversold territory
On September 18, 2026, the Stochastic Oscillator for AMZN moved out of oversold territory and this could be a bullish sign for the stock. Traders may want to buy the stock or buy call options. Tickeron's A.I.dvisor looked at 58 instances where the indicator left the oversold zone. In 46 of the 58 cases the stock moved higher in the following days. This puts the odds of a move higher at over 79%.
Technical Analysis (Indicators)
Bullish Trend Analysis
Following a +3.15% 3-day Advance, the price is estimated to grow further. Considering data from situations where AMZN advanced for three days, in 230 of 324 cases, the price rose further within the following month. The odds of a continued upward trend are 71%.
Bearish Trend Analysis
The Momentum Indicator moved below the 0 level on September 14, 2026. You may want to consider selling the stock, shorting the stock, or exploring put options on AMZN as a result. In 41 of 76 cases where the Momentum Indicator fell below 0, the stock fell further within the subsequent month. The odds of a continued downward trend are 54%.
The Moving Average Convergence Divergence Histogram (MACD) for AMZN turned negative on August 17, 2026. This could be a sign that the stock is set to turn lower in the coming weeks. Traders may want to sell the stock or buy put options. Tickeron's A.I.dvisor looked at 54 similar instances when the indicator turned negative. In 28 of the 54 cases the stock turned lower in the days that followed. This puts the odds of success at 52%.
AMZN moved below its 50-day moving average on September 14, 2026 date and that indicates a change from an upward trend to a downward trend.
The 10-day moving average for AMZN crossed bearishly below the 50-day moving average on September 15, 2026. This indicates that the trend has shifted lower and could be considered a sell signal. In 11 of 15 past instances when the 10-day crossed below the 50-day, the stock continued to move higher over the following month. The odds of a continued downward trend are 73%.
Following a 3-day decline, the stock is projected to fall further. Considering past instances where AMZN declined for three days, the price rose further in 50 of 62 cases within the following month. The odds of a continued downward trend are 59%.
The Aroon Indicator for AMZN entered a downward trend on September 18, 2026. This could indicate a strong downward move is ahead for the stock. Traders may want to consider selling the stock or buying put options.
Fundamental Analysis (Ratings)
The Tickeron SMR rating for this company is 33 (best 1 - 100 worst), indicating very strong sales and a profitable business model. SMR (Sales, Margin, Return on Equity) rating is based on comparative analysis of weighted Sales, Income Margin and Return on Equity values compared against S&P 500 index constituents. The weighted SMR value is a proprietary formula developed by Tickeron and represents an overall profitability measure for a stock.
The Tickeron Price Growth Rating for this company is 47 (best 1 - 100 worst), indicating steady price growth. AMZN’s price grows at a higher rate over the last 12 months as compared to S&P 500 index constituents.
The Tickeron Profit vs. Risk Rating rating for this company is 50 (best 1 - 100 worst), indicating well-balanced risk and returns. The average Profit vs. Risk Rating rating for the industry is 94, placing this stock slightly better than average.
The Tickeron PE Growth Rating for this company is 87 (best 1 - 100 worst), pointing to worse than average earnings growth. The PE Growth rating is based on a comparative analysis of stock PE ratio increase over the last 12 months compared against S&P 500 index constituents.
The Tickeron Valuation Rating of 89 (best 1 - 100 worst) indicates that the company is significantly overvalued in the industry. This rating compares market capitalization estimated by our proprietary formula with the current market capitalization. This rating is based on the following metrics, as compared to industry averages: P/B Ratio (4.960) is normal, around the industry mean (57.056). P/E Ratio (20.411) is within average values for comparable stocks, (39.827). Projected Growth (PEG Ratio) (1.510) is also within normal values, averaging (1.801). Dividend Yield (0.000) settles around the average of (0.017) among similar stocks. AMZN's P/S Ratio (3.447) is slightly higher than the industry average of (1.321).
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a provider of on-line retail shopping services
Industry InternetRetail
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