Amazon Crosses $3 Trillion: The Q2 2026 Earnings Breakdown

Net income surged to $62.6 billion (diluted EPS of $5.75 or $5.93, depending on the reporting basis), up 245% year-over-year, but this was heavily skewed by a $53.4 billion non-operating gain from the revaluation of the company's investment in Anthropic . By segment, North America revenue was $116.2 billion (+16% YoY), International revenue was $42.2 billion (+15% YoY), and Advertising revenue was $19.8 billion (+26% YoY) .

AWS Performance: The Engine of the Rally

Amazon Web Services was the clear star of the quarter. AWS revenue totaled $42.2 billion, up 37% year-over-year — the fastest growth rate since 2021, well above analyst expectations of roughly 31%, and representing the division's fifth consecutive quarter of accelerating growth S. The division's annualized revenue run rate reached $169 billion, and its operating margin hit 39%, its highest level in recent history .

AWS contributed approximately 60% of Amazon's total operating income, cementing its role as the company's primary profit engine . CEO Andy Jassy highlighted a $496 billion backlog of undelivered cloud capacity, indicating that demand continues to far outpace Amazon's ability to build infrastructure SS.

AI-Driven Capital Expenditure: $220 Billion and Still Not Enough

Management raised full-year 2026 capital expenditure guidance to approximately $220 billion, up from a prior estimate of $200 billion (a 10% increase), citing higher memory and data center component costs alongside continued investment in AI and cloud infrastructure S.

CEO Andy Jassy stated bluntly that AI demand is outstripping available computing capacity through at least 2027, justifying the elevated spending: "We will still not have enough capacity to meet all the demand we have in 2026" SSS. Jassy also noted that the company's AI business and chips business each exceeded $25 billion in annualized run rates, with both growing triple digits year-over-year .

The accelerated investment pace caused free cash flow to turn negative for the quarter — a $7.6 billion outflow — but management expressed confidence in robust free cash flow generation over the longer term as new capacity comes online .

Market Reaction: A Historic Milestone

The stock surged over 9% in after-hours trading immediately following the July 30 earnings release . On August 3, 2026, Amazon shares closed at $284.02, up 4.58%, after hitting an intraday all-time high of $287.16 . Amazon's stock is up approximately 25% year-to-date as of that date .

It took Amazon just over two years to add the trillion dollars needed to go from a $2 trillion valuation (first reached in June 2024) to $3 trillion . On the day of the milestone, founder Jeff Bezos returned to #3 on the global rich list .

Analyst Outlook: Nearly Universal Optimism

Wall Street reaction was overwhelmingly positive. The consensus rating across analysts tracked by multiple aggregators is Strong Buy / Buy, with zero sell ratings among the 64 analysts surveyed by S&P Global .

Key price target updates:

Sources: Bank of America , Benchmark , Morgan Stanley SS, Truist S, KeyBanc S, Citi S, JPMorgan S.

Broader consensus averages ranged from approximately $313 to $325, implying roughly 10%–16% upside from the August 3 close, with several analysts issuing targets above $350 SSS. Key bullish themes cited across analyst notes include continued AWS margin expansion, sustained advertising revenue growth, and the belief that AI capital expenditures will generate strong long-term returns S.