SEATTLE, April 29, 2026, 13:46 PDT
Amazon.com Inc. topped analyst forecasts in the first quarter, fueled by its cloud arm posting the strongest gains in over three years as customers sought more AI capacity. Net sales were up 17% to $181.5 billion. Amazon Web Services jumped 28% to $37.6 billion in sales. “AWS is growing 28%” on a large base, CEO Andy Jassy noted. Amazon
Investors have been pushing Amazon to prove its hefty AI investments are driving actual revenue rather than just ballooning data-center costs. The company cleared the bar: Wall Street was looking for $177.28 billion in sales and $1.63 a share, but Amazon delivered $2.78 a share and net income hit $30.3 billion.
AWS takes the spotlight here. RBC Capital Markets’ Brad Erickson dubbed the quarter “pivotal,” eyeing whether AWS can deliver growth that justifies Amazon’s ramped-up spending. Bank of America’s Justin Post pointed to “strong demand for AWS”—as long as margins didn’t slip. Business Insider
Amazon’s cloud unit, AWS, leases out computing and storage to businesses and developers. According to Bloomberg, the division’s growth picked up thanks to new data-center capacity and more demand from Anthropic and OpenAI—two heavyweight AI model makers.
Not all of Amazon’s profit came from running the business. The company said its first-quarter net income was boosted by $16.8 billion in pre- tax gains related to its Anthropic investment. Operating income climbed too, up to $23.9 billion versus $18.4 billion in the prior year.
The bill keeps climbing. Amazon’s property and equipment outlays hit $44.2 billion in the quarter—a chunk of that flowing into data centers, chips, logistics, the usual capital expenditure suspects. Over the last 12 months, free cash flow dropped to $1.2 billion, down sharply from $25.9 billion a year ago.
Amazon CEO Andy Jassy singled out the company’s homegrown chip operations—Graviton, Trainium, and Nitro—as a key driver. Amazon disclosed that this segment has hit a $20 billion annualized revenue pace. The company also revealed OpenAI’s plans to source about two gigawatts of Trainium processing power from AWS starting in 2027. Anthropic is lined up for as much as five gigawatts, according to Amazon. For context, a gigawatt refers to the kind of massive power typically discussed when sizing up big data centers.
AWS continues to drive Amazon’s profits, turning in $14.2 billion in operating income, a bump from $11.5 billion the year before. Its operating margin hit 37.7%, according to MarketWatch, giving Amazon breathing room to support its lower-margin retail and delivery businesses.
Competition between Microsoft and Alphabet is front and center, as both target enterprise AI customers with Azure and Google Cloud. All three cloud units were under the microscope during this earnings-packed day. Greg Calnon at Goldman Sachs Asset Management told CNBC there’s “a lot more enterprise adoption” moving the needle for hyperscalers. RBC’s Erickson noted that strong numbers could give Big Tech room to boost future capex plans. Investopedia
The risk stands out—Amazon could face increased depreciation, power, and chip expenses if AI demand lags behind its new buildout. Shares slipped after hours, Barron’s noted, even with the company topping estimates, as investors zeroed in on surging capital spending and a steep 95% plunge in free cash flow.
Amazon projected net sales for the second quarter between $194 billion and $199 billion, pointing to growth of 16% to 19%. Operating income was forecast at $20 billion to $24 billion. While the sales target ran ahead of what analysts were looking for, attention from some investors shifted to the operating income range—and the underlying spending driving those numbers.
Amazon’s revenue is accelerating—just what investors had hoped for. Now, the focus turns to AWS. The question: can it grow quickly enough to translate the AI push into cash, rather than simply expanding capacity?
