Amazon raised its 2026 capital expenditure forecast to $220 billion, citing higher memory costs, after posting a second-quarter earnings beat driven by accelerating cloud growth. AWS revenue rose 37% year over year to $42.2 billion, while a $53.4 billion pre-tax gain tied to Amazon's stake in Anthropic pushed net income to $62.6 billion.
Amazon raised its 2026 capital expenditure forecast to $220 billion, up from the $200 billion guidance it had held since February, as rising memory costs pushed spending above plan. Chief Executive Andy Jassy said the company still won't have enough capacity to meet demand in 2026 or 2027, and noted that demand for 2028 is already emerging.
Capital expenditure in the quarter alone reached $54.2 billion, up from $32.1 billion a year earlier. Amazon also sold $25 billion in bonds earlier this month, with investors demanding wider spreads on its long-dated debt.
AWS growth accelerates past estimates
AWS revenue expanded 37% year over year to $42.2 billion, beating the $40.54 billion StreetAccount had forecast. That marked the cloud unit's fastest growth since 2021.
Jassy told investors AWS is "booming," according to CNBC, pointing to the company's AI and chip businesses, which each exceeded a $25 billion annual revenue run rate. The unit's contracted backlog, work not yet delivered, reached $496 billion during the quarter.
Shares jump after earnings beat
Amazon's stock shot up more than 10% in extended trading after the company topped Wall Street's second-quarter estimates. Revenue came in at $200.61 billion, above the $196.47 billion analysts had forecast, while earnings reached $5.75 a share against a $1.82 estimate.
Anthropic stake drives a one-time windfall
Much of the earnings beat came from outside Amazon's core business: the company posted a $53.4 billion pre-tax gain it attributed primarily to its investment in Anthropic. Amazon has invested $13 billion in Anthropic, with the potential for up to $20 billion more.
Microsoft, which previously put $5 billion into Anthropic, reported a $3.2 billion gain of its own from the stake. Anthropic's valuation has climbed alongside demand for its Claude models: a Series H round in late May valued the startup at $965 billion. The company also confidentially filed for an IPO in June.
Despite the earnings beat, the spending has pushed free cash flow negative $7.6 billion over the trailing twelve months, reversing an $18.2 billion inflow a year earlier.
Sources: CNBC, Financial Times, Business Insider
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