Amazon jumps nearly 9% as cloud and advertising growth drive earnings beat

Amazon shares surged nearly 9% in after hours trading after the company reported stronger than expected second quarter results, driven by accelerating cloud and artificial intelligence demand. Amazon reported net sales of $200.6 billion, up 20% from $167.7 billion a year earlier. Operating income rose 43% to $27.5 billion from $19.2 billion. Amazon Web Services generated $42.2 billion in revenue, up 37% from the previous year and marking its fastest growth in 18 quarters. The result exceeded analysts’ expectations of approximately $40.5 billion and growth of around 31%. AWS operating income climbed 64% to $16.6 billion, giving the cloud division an operating margin of 39.4%. AWS accounted for about 21% of Amazon’s total revenue but generated more than 60% of its operating income during the quarter. Amazon said its AWS artificial intelligence business and custom chip business each surpassed annual revenue run rates of $25 billion, with both growing at triple digit rates. The company highlighted multiyear computing commitments from Anthropic and OpenAI for its Trainium chips, alongside growing adoption from companies including Uber and Pinterest. Advertising revenue increased 26% to ...