Amazon shares surge higher after cloud business grows 37%

July 31, 2026 - 00:02

Amazon's stock price rose sharply in after-hours trading Thursday after the company reported stronger-than-expected earnings, driven largely by a 37 percent jump in revenue from its cloud computing division, Amazon Web Services. The results beat analyst forecasts and signaled that the tech giant's most profitable unit continues to benefit from corporate spending on artificial intelligence and data storage.

The company's overall sales for the quarter ending in June reached $148 billion, up 10 percent from the same period last year. Net income more than doubled to $13.5 billion, helped by cost-cutting measures and a rebound in its advertising business. AWS alone brought in $26.3 billion, accounting for a growing share of Amazon's total profit.

Investors have been watching Amazon closely for signs that heavy investments in AI infrastructure are paying off. The company's capital expenditure rose to $53 billion in the quarter, much of it directed toward data centers and chips needed to run AI workloads. Chief Executive Andy Jassy said demand for AI services is "enormous" and that AWS is seeing strong adoption from both startups and large enterprises.

The stock jumped more than 6 percent in extended trading following the release. The rally added roughly $100 billion to Amazon's market value, underscoring how much investor sentiment hinges on cloud growth. Analysts noted that the results ease concerns that Amazon was falling behind rivals like Microsoft in the AI race.

Despite the upbeat news, Amazon's retail business showed more modest growth. Online store sales rose just 5 percent, while physical store sales were flat. The company also warned that it expects higher spending on fulfillment and shipping in the second half of the year. Still, the cloud performance was enough to overshadow those pressures and lift the broader outlook for the stock.