Amazon shares lift as cloud revenue beats expectations amid AI demand
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The news: Amazon has seen its shares lift in aftermarket trade after its cloud computing arm Amazon Web Services (AWS) delivered its fastest quarterly growth in three years, with first quarter revenue up 28% to USD37.6 billion ($52.82 billion) compared to the previous year.
However, capital investment in chasing the AI boom also came in higher than expected. The company spent USD151 billion on property and equipment in the 12 months to 31 March, up USD59.3 billion on the previous comparable period.
The numbers: At 8:26am AEST, shares in Amazon had lifted 4.7% to USD263.04 in after market trading.
The consensus expectation for Amazon Web Services revenue was for a 25.1% increase to USD36.6 billion.
Capital investment for the first quarter came in at USD44.2 billion, 76% higher than the previous corresponding period and ahead of analyst expectations for a USD41.4 billion increase.
Amazon’s proprietary chip business also hit an annual revenue run rate of more than USD20 billion.
Overall, net income for the March quarter period increased to USD30.3 billion. This is 77.2% ahead of the USD17.1 billion reported in the previous corresponding period. Operating income came in at USD23.9 billion, higher than the USD18.4 billion a year prior.
Operating income guidance for the second quarter was reported as between USD20 billion and USD24 billion. The USD22 billion midpoint is slightly below the estimated USD22.62 billion.
The context: Over the period, Amazon secured commitments from OpenAI to use about 2 gigawatts of compute capacity using AWS infrastructure which will ramp in from 2027. They also announced a string of new AWS agreements with Anthropic Meta and Nvidia, among others.
The sources: Amazon Q1 2026 earnings release, Bloomberg, Reuters
