Amazon 2Q26: A Microsoft 2.0 encore

Research evidence excerpt

Amazon 2Q26: A Microsoft 2.0 encore

Mark Shmulik +1 917 344 8508 mark.shmulik@bernsteinsg.com 31 July 2026

RESULTS

A clean quarter, and AWS finally breaks out. Revenues were up 20% Y/Y to $200B+ beating Consensus and above the

top-end of guidance though partially aided by a pull forward of many Prime Day markets into 2Q. AWS finally saw a visible

inflection in both revenue growth at +37% up from 28% last quarter, and backlog that reached $496B, or $132B Q/Q though

includes the latest $100B Anthropic deal. The rest of the business continued to do its part to not distract from the AWS story

with advertising, in particular, delivering an impressive 26% Y/Y growth rate aided by new AI search ad products, CTV traction,

and Prime Day attach rates. Revenue guidance of $197-202B came in a touch light on mis-modelled Street estimates back to

Prime Day timing.

Operating Income was also a healthy beat across the board reaching $27B+ in the quarter though aided by two separate

$600M one-time credits tied to Tariff refunds that boosted NA retail margins to nearly 8% and a change in fair value of AWS

energy contracts that pushed margins up to 39% (and held at 37% ex-one-time). OI guidance of $22.5-26.5B continues to

track in the right direction as we move into the second half of the year.

A solid print was able to withstand 2026 CapEx coming up ~$20B to $220B mostly tied to higher memory and other BOM

costs. Critically management commentary on AI investment ROIC seeing a 3-year payback in server spending, commits through

2028, AI and chip revenue run-rate growth acceleration, and a trillion dollar long-term revenue target all helped investors finally

underwrite the Amazon AI story, at least for a quarter.

Retail

• Online Stores revenue reached $70.4B, growing 15% Y/Y.