Amazon Web Services, the cloud division of the company, generated revenue of $37.59 billion this quarter, reflecting a 28% increase compared to the same period last year. This marks the fastest growth for the division since the second quarter of 2022. Wall Street analysts had anticipated a growth rate of 26% or about $36.64 billion. AWS constitutes nearly one-fifth of Amazon’s total revenue and a significant portion of its operating profit.
For the quarter, Amazon reported revenue of $181.5 billion, representing a 17% increase from the prior year, surpassing the estimated $177.2 billion. Earnings Per Share (EPS) were $2.78, exceeding the forecasted $1.64.
The surge in Amazon’s cloud business resulted from higher-than-anticipated investments aimed at expanding its data center capacity. Over the 12 months ending on March 31, Amazon allocated $151 billion towards property and equipment. CEO Andy Jassy announced an ambitious $200 billion spending plan for this year, marking a 56% increase from 2025, primarily focused on data centers. In the first quarter, Amazon’s capital expenditures reached $44.2 billion, surpassing estimates. Due to this elevated spending, Amazon’s trailing 12-month free cash flow fell to $1.2 billion from $25.9 billion previously.
The company has invested in both OpenAI and Anthropic during their respective funding rounds, ensuring these labs commit to spending over $100 billion on AWS services in the upcoming years.
E-commerce activities remain the primary driver of Amazon’s sales, growing 12% to $64.3 billion during the quarter. Additionally, advertising revenue rose by 24% to $17.2 billion.
“We’re in the midst of significant transformative changes in our time, we’re well poised to lead, and I feel very optimistic about the future for our customers and Amazon,” Jassy remarked in his post-earnings comments to investors.
For the current quarter, Amazon anticipates sales between $194 billion and $199 billion, exceeding the $188.9 billion estimate, with operating income expected to fall between $20 billion and $24 billion, compared to estimates of $22.65 billion.
Amazon shares are now trading 3.2% higher in after-hours trading, having finished the regular session up by 1.3%. The stock has risen 31% over the past month and has reached a 52-week high.
