Amazon’s second quarter was defined by rapid expansion in its cloud division and disciplined cost management, which led to a positive market reaction. Management attributed the strong results to accelerating growth in AWS, particularly from both AI and core cloud services, and improvements in operational efficiency across its global fulfillment network. CEO Andy Jassy highlighted that AWS saw its fastest growth rate in over four years, while new AI-driven products and custom silicon contributed to rising customer demand. The company also benefited from ongoing automation, expanded product selection, and robust performance in advertising and grocery businesses.
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Amazon (AMZN) Q2 CY2026 Highlights:
- Revenue: $200.6 billion vs analyst estimates of $196.8 billion (2% beat)
- EPS (GAAP): $5.75 vs analyst estimates of $1.82 (215% beat)
- Operating Margin: 13.7%, up from 11.4% in the same quarter last year
- Market Capitalization: $2.94 trillion
While we enjoy listening to the management’s commentary, our favorite part of earnings calls is the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions From Amazon’s Q2 Earnings Call
- Doug Anmuth (J.P. Morgan): asked about the sustainability of AWS’s high margins and whether AI workloads would compress profitability. CFO Brian Olsavsky attributed margin strength to disciplined cost management and capacity optimization, noting margins will fluctuate but efficiency gains are significant.
- Justin Post (Bank of America): inquired if AWS’s growth was primarily driven by new capacity coming online and what expansion is planned for the second half. CEO Andy Jassy emphasized that both AI and core workloads are fueling demand, and Amazon remains on track to double power capacity by the end of 2027.
- Brian Nowak (Morgan Stanley): questioned when data center investment might slow and how Amazon views selling Trainium chips to third parties. Jassy said demand for cloud and AI capacity remains strong through 2028, and Amazon is considering external sales of Trainium in the future.
- Colin Sebastian (Baird): asked about Amazon’s strategy in agentic applications and capital sources for growth. Jassy highlighted the opportunity in agentic apps like Q and Kiro and said funding options remain flexible, including recent debt issuance.
- Ken Gawrelski (Wells Fargo): asked how AWS backlog impacts future capacity and how pricing will address cost inflation. Jassy explained backlog growth informs capacity planning, and future contracts will factor in cost inflation, with existing deals locked at signed prices.
Catalysts in Upcoming Quarters
In upcoming quarters, the StockStory team will be monitoring (1) the pace of AWS and AI workload adoption, (2) ongoing improvements in fulfillment efficiency and automation, and (3) growth in grocery, advertising, and new agentic applications. Execution on infrastructure build-out and the ability to monetize new AI-driven services will also be critical to tracking Amazon’s progress against its long-term strategy.
Amazon currently trades at $272.76, up from $235.50 just before the earnings. Is the company at an inflection point that warrants a buy or sell? The answer lies in our full research report (it’s free).
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