US Internet and Software: 2Q26 Cloud Compare: Revenues Accelerate Amid Rising Capex Tide

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US Internet and Software: 2Q26 Cloud Compare: Revenues Accelerate Amid Rising Capex Tide

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31 Jul 2026 14:59:07 ET │ 18 pages

US Internet and Software

2Q26 Cloud Compare: Revenues Accelerate Amid Rising Capex Tide

CITI'S TAKE

Tyler Radke AC

We recap results for the top 4 cloud providers post CQ2 earnings. Overall +1-415-951-1660

industry growth accelerated ~9pts to +50% YoY on upticks at MSFT, AWS, tyler.radke@citi.com

GCP and OCI. MSFT’s Azure growth accelerated 4pts sequentially to +43%

YoY CC (vs +39% in FQ3), AMZN’s AWS growth accelerated 9pts Ronald Josey AC

sequentially to +37% YoY CC (vs 28% in Q1), Google Cloud growth +1-212-816-4545

accelerated ~19pts to +82% YoY (vs 63% in Q1), and OCI growth accelerated ronald.josey@citi.com

11pts to 92% YoY CC. AWS remained the market leader with 41% share, but

it continued to lose share (-130bps QoQ) while Azure share held relatively Yitchuin Wong

steady QoQ at ~30%, Google Cloud gained 140bps QoQ to 24%, and OCI yitchuin.wong@citi.com

uptick of 10bps to ~5.6%. Overall CapEx jumped almost $20B QoQ.

Jake Hallac, CFA

jake.hallac@citi.comSales Get Boost with Greater Efficiencies — Total cloud revenue reached $103.8B

in 2Q, up +50% YoY, accelerating 9pts QoQ after +6pts in Q1. Incremental YoY dollars Andrew Girard, CFA

were $35B, driven by the continued demand for AI infrastructure and solutions. andrew.girard@citi.com

MSFT reported (Wed. 7/29) Azure 4QFY’26 revenues of ~$31.1B, 4pts uptick QoQ to

+43% YoY CC, with an incremental YoY of $9.3B vs. $7.7B last Q. Azure’s solid Jamesmichael Sherman-Lewis

acceleration was attributed to greater efficiencies bringing compute capacity online jamesmichael.shermanlewis@citi.com

in the quarter. AMZN’s AWS (Thurs. 7/30) revenues reached $42.2B, +37% YoY CC,