Amazon AMZN reported second-quarter 2026 net income of $5.75 per share, more than triple the $1.68 per share earned in the second quarter of 2025. The sharp jump was driven largely by a non-operating pre-tax gain of $53.4 billion tied to the company's investment in Anthropic, reflected in "Other income (expense), net."
Adjusted earnings came in at $1.88 per share compared with the Zacks Consensus Estimate of $1.83.
Net sales of $200.6 billion rose 20% year over year. The figure beat the consensus mark by 1.77%. Excluding a $0.1 billion favorable impact from foreign exchange, net sales still increased 20% compared with the year-ago period. Growth was broad-based across all three segments, with AWS once again the standout performer.
Operating income increased 43% year over year to $27.5 billion. Operating margin expanded to 13.7% of worldwide net sales, up from 11.4% in the year-ago quarter and ahead of the 13.1% posted in the first quarter of 2026.
Amazon.com, Inc. Price, Consensus and EPS Surprise
Amazon.com, Inc. price-consensus-eps-surprise-chart | Amazon.com, Inc. Quote
Top-Line Details
Net product sales rose 14% year over year to $77.6 billion from $68.2 billion. Net service sales increased 24% year over year to $123 billion from $99.5 billion.
By segment, North America revenues increased 16% year over year to $116.2 billion. International revenues rose 15% year over year to $42.2 billion.
AWS revenues jumped 37% year over year to $42.2 billion, marking the segment's fastest growth rate in 18 quarters and pushing its annualized revenue run rate to $169 billion.
Third-party seller services revenues rose 16% year over year (excluding FX) to $46.8 billion, while worldwide paid units grew 17% year over year. Third-party sellers accounted for 61% of worldwide paid units.
Advertising services revenues increased 26% year over year to $19.8 billion. Subscription services revenues, which include Prime membership fees, rose 12% year over year to $13.7 billion.
Physical store sales rose 4% year over year to $5.79 billion from $5.60 billion. Online store sales rose 15% year over year (excluding FX) to $70.4 billion.
AWS and AI Developments
AWS' AI business and its chips business — spanning Graviton, Trainium and Nitro — each surpassed a $25 billion annualized revenue run rate, with both growing at triple-digit percentage rates year over year.
Anthropic and OpenAI, described as the two leading AI labs, made multi-year, multi-gigawatt commitments to Trainium. A number of AI startups, including NEURA Robotics and Odyssey, along with larger enterprises such as Uber and Pinterest, also adopted or expanded Trainium usage.
Amazon released Graviton5 into general availability, citing up to 25% better compute performance than Graviton4 and up to 30-40% better price-performance than comparable instances; Graviton is now used by 98% of the top 1,000 EC2 customers, with revenue commitments up nearly 3x quarter over quarter.
More than 10 fully managed foundation models were added to Amazon Bedrock during the quarter, including OpenAI's GPT-5.6, Anthropic's Claude Opus 5, Google DeepMind's Gemma 4 and SpaceXAI's Grok 4.3. Bedrock customer spend in the quarter exceeded the combined spend of all prior quarters, and more customers were added in the past six months than in Bedrock's first two years.
Amazon previewed AWS Continuum, a vulnerability discovery and remediation tool and expanded Bedrock AgentCore with new Payments, Web Search and Harness capabilities. The company also introduced Lambda MicroVMs with stateful sessions lasting up to eight hours, a next-generation OpenSearch Serverless offering scaling up to 20x faster than its predecessor, and a new log analytics engine for Amazon OpenSearch Service delivering up to 4x better price performance.
Amazon committed $1 billion to launch AWS Forward Deployed Engineering, embedding AI engineers with customers such as the Allen Institute, Cox Automotive, the NBA, the NFL, Ricoh and Southwest Airlines. It also announced general availability of AWS Secret Cloud for Industry, with Northrop Grumman as its first classified-workload customer, alongside a commitment of up to $1 billion in cloud credits to support U.S. Intelligence Community cloud migration.
New AWS customer agreements were signed with Warner Bros. Discovery, Vodafone, Siemens Energy, Ryanair, Pinterest, Snowflake, Moody's, Danske Bank, the WNBA, Pennymac, Fiserv, WPP Enterprise Solutions and several others.
Kiro, Amazon's spec-driven coding agent, became available on iOS, with usage tripling quarter over quarter, and AWS DevOps Agent gained new release-management capabilities.
Consumer, Prime and Logistics
Amazon delivered over 40% more items same-day or overnight in the first half of 2026 compared with the prior-year period, with Grocery and Everyday Essentials growing meaningfully faster than the rest of the business.
Amazon Now, the company's ultra-fast delivery service, expanded to 80 new U.S. cities and towns plus several cities in Egypt, bringing coverage to nine countries and more than 250 cities and towns, with gross sales and units sold up more than 80% quarter over quarter, and customers served over 60% quarter over quarter.
Rufus and Alexa+ were combined into Alexa for Shopping, an agentic shopping assistant; active users nearly doubled and interactions rose more than 5x year over year. Alexa+ was also expanded to Germany, Austria, France and Brazil; customers who use Alexa for Shopping spend over 40% more per order, and Alexa+ trial users sign up for Prime at a nearly 25% higher rate.
Amazon Supply Chain Services launched, letting outside businesses use Amazon's own logistics network, with Procter & Gamble, 3M, Lands' End and American Eagle Outfitters among the first customers. Amazon Business reached $60 billion in annualized gross sales, with item selection up nearly 30% year over year.
A next-generation version of Proteus, Amazon's autonomous warehouse robot, was introduced, capable of moving goods up to 1,300 pounds and taking plain-language, conversational direction from employees.
Amazon Pharmacy more than doubled (2x) its new customer base in the first half of 2026, with same-day prescription deliveries growing nearly 5x and out-of-pocket customer savings rising more than 400% year over year to almost $250 million so far in 2026. Ads Agent, which lowers cost-per-impression by 8% and cost-per-acquisition by 6% for advertisers who use it, expanded to 11 new countries this year.
On Prime Video, the series premiere of Off Campus drew 36 million global viewers in its first 12 days, becoming the platform's third-highest-viewed series debut ever. The NBA's inaugural season on Prime Video peaked at 6.5 million U.S. viewers for a Game 7 broadcast, with European viewership more than doubling year over year. NASCAR's second season on the platform averaged 2.3 million viewers.
Amazon completed four additional satellite launches for its Amazon Leo low Earth orbit network, bringing the constellation to nearly 400 satellites — enough, the company said, to begin initial satellite Internet service later this year.
Operating Details
North America segment operating income rose 21% year over year to $9.1 billion from $7.5 billion, with operating margin flat at 7.9%. International segment operating income rose 15% year over year to $1.7 billion from $1.5 billion, with operating margin flat at 4.1%. AWS segment operating income surged 64% year over year to $16.6 billion from $10.2 billion, with AWS operating margin expanding to 39.4% from 32.9%.
Balance Sheet and Cash Flow
As of June 30, 2026, cash and cash equivalents stood at $78.2 billion, down from $101.8 billion as of March 31, 2026. Marketable securities totaled $44.8 billion as of June 30, 2026, up from $41.3 billion in the previous quarter.
Long-term debt was $128.9 billion at the end of the reported quarter, up from $119.1 billion at the end of the previous quarter.
Operating cash flow for the trailing 12 months increased to $161.4 billion compared with $121.1 billion in the prior-year period.
Free cash flow for the trailing 12 months swung to an outflow of $7.6 billion compared with an inflow of $18.2 billion a year earlier, driven by a $66.1 billion year-over-year increase in net property and equipment purchases tied to AI infrastructure investment.
Capital expenditures on property and equipment totaled $54.2 billion in the quarter, up 68% from $32.2 billion in the second quarter of 2025.
Guidance
For the third quarter of 2026, Amazon expects net sales between $197 billion and $202 billion, indicating growth of 9% to 12% compared with the third quarter of 2025. This guidance reflects an unfavorable foreign exchange impact of approximately 80 basis points and a sequential headwind from Prime Day shifting into the second quarter; excluding the Prime Day timing shift in both years, third-quarter growth would be nearly 400 basis points higher.
Operating income for the third quarter is expected to be between $22.5 billion and $26.5 billion, suggesting growth of 29% to 52% compared with $17.4 billion in the third quarter of 2025.
Zacks Rank & Stocks to Consider
Amazon currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the broader Zacks Retail-Wholesale sector are Sally Beauty SBH, Dutch Bros BROS and Insight Enterprises NSIT, each carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Sally Beauty, Dutch Bros and Insight Enterprises are set to report upcoming quarterly results on Aug. 3, Aug. 5 and Aug. 6, respectively.
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