AWS hit $42B in revenue, growing 37% YoY at its fastest pace in 18 quarters, with a 39.4% operating margin and $496B contracted backlog. Since Q2 earnings, AMZN rose 9% versus SPY's 2% and QQQ's 4% gain, rewarding direct stock exposure over index ownership. Capex hit $54B in one quarter and free cash flow turned negative $7.6B, but most AI capacity is already contracted for five-year terms.
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I keep buying Amazon (NASDAQ:AMZN) because every quarter the AI capex story looks less like a bet and more like a receipt. I have added on strength and pullbacks, and I plan to keep adding. AWS revenue hit $42.23B, growing 37% year over year, the segment's fastest growth in 18 quarters.
The trajectory is compelling: 20% to 24% to 28% to 37% across Q3 2025 through Q2 2026. Growth is accelerating even as the base expands, with an AWS operating margin of 39.4%. Amazon's chips and AI businesses each eclipsed run rates of more than $25 billion in Q2, both growing at triple-digit percentages year over year. 98% of Amazon's top 1,000 EC2 customers use Graviton, with revenue commitments increasing nearly three times quarter-over-quarter.
Anthropic and OpenAI have made multi-year, multi-gigawatt commitments to Trainium. AWS's backlog now sits at $496 billion, growing triple digits year over year. Q2 operating income landed at $27.46B, up 43.2% YoY.
Advertising is a $70B+ TTM business growing 26%. Amazon holds $78.21B in cash, debt/equity of 0.37, and interest coverage at 35x, enabling its $200B 2026 capex plan without external funding. 24/7 Wall St has helped investors make money for over two decades, and our top analysts just finished ranking the definitive Top 10 Stocks To Buy Now. Not the ten biggest companies.
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