Amazon delivered a striking set of first-quarter 2026 results that underscored both the scale of its AI investment and its ability to generate growth across every major business segment simultaneously. Total revenue reached $181.5 billion, up 17% year-over-year and comfortably ahead of the $177.3 billion analyst consensus. Adjusted earnings per share of $2.78 demolished the $1.64 forecast by a margin that sent the stock bouncing in extended trading before settling lower as investors processed the capital expenditure picture.
AWS posted its fastest growth in 15 quarters, with cloud revenue rising 28% to $37.6 billion against a consensus expectation of $26% growth. The result materially narrows the perceived growth gap between Amazon and Microsoft Azure, which grew 31% in the same period. CEO Andy Jassy framed the milestone directly in his earnings statement: “AWS is growing 28% on a very large base, our chips business topped a $20 billion revenue run rate growing triple digits year-over-year, Advertising grew to over $70 billion in TTM revenue, and unit growth in our Stores reached 15%.”
Amazon’s advertising business continued to punch above its weight, growing 24% to $17.24 billion and significantly outpacing retail revenue growth. Sponsored product listings on the e-commerce site remain the dominant revenue driver, but new inventory from Prime Video advertising and Twitch is accelerating the unit’s scale. Amazon announced that Prime Day 2026 would be held in June rather than its typical July slot, which the company says will be captured within Q2 guidance.
The number that divided investor opinion was capital expenditure, which reached $44.2 billion in a single quarter, up sharply from $25 billion in Q1 2025. Amazon’s full-year capex plan stands at approximately $200 billion, driven by AI infrastructure including data centres and the company’s growing custom silicon business. The free cash flow on a trailing 12-month basis fell to $1.2 billion from $25.9 billion a year earlier, reflecting the sheer scale of property and equipment purchases that have been pulled forward into this period.
For Q2, Amazon guided to net sales of between $194 billion and $199 billion, implying 16% to 19% growth. Operating income is projected at $20 billion to $24 billion, above Wall Street’s consensus. The Amazon Leo satellite internet service, with approximately 270 satellites currently in orbit and a target of 7,700, represents another long-term capital allocation decision that investors are still calibrating against near-term free cash flow.
