Amazon beats Q2 earnings expectations, as AI, chip businesses see $25 billion run rate
Amazon reported its second quarter earnings on Thursday, beating expectations across the board. The company posted revenue of $200.6 billion, significantly higher than the $197.01 billion anticipated by analysts. Earnings per share reached $5.75, which represents a strong increase over the same period last year. Following the announcement, Amazon shares rose by more than 9 percent.
CEO Andy Jassy highlighted the performance of Amazon Web Services, which grew 36.7 percent year-over-year. This marks the fastest growth for the cloud division in 18 quarters. A major factor in this success is the company's aggressive expansion into new hardware and software. Both the AI and chip businesses have now reached annual run rates exceeding $25 billion.
In the retail segment, Amazon maintained record delivery speeds for Prime members throughout the first half of the year. The company delivered over 40 percent more items via same-day or overnight shipping compared to previous periods. Grocery and everyday essentials contributed to this momentum as consumer demand remains steady in these categories.
The advertising business also showed clear strength, posting 26 percent growth compared to the prior year. Despite these gains, Amazon reported a negative free cash flow of $7.6 billion. This is a 142 percent decline from last year, driven by the massive capital required to scale artificial intelligence infrastructure. The company continues to rent chip capacity to major partners, including Meta, OpenAI, and Anthropic, while Jassy explores selling custom chips for third-party data center installation.