Amazon lifts cloud revenue 37 percent and slips into negative cash flow

Amazon achieved growth of 36.7 percent against the year before in its cloud division in the second quarter of 2026. Chief executive Andy Jassy named an annual revenue run rate of more than 25 billion dollars each for the business in artificial intelligence and for the company chips.

At the same time the group raised its investment for the current year from 200 to 220 billion dollars. Free cash flow fell to minus 7.6 billion dollars.

Investors took the combination calmly at first. The share rose clearly after the release, while the figures from Alphabet and Meta led to losses in the same days.

The short version

• The cloud division grew 36.7 percent in the second quarter of 2026, with artificial intelligence and the company chips each at more than 25 billion dollars of annual run rate.
• Investment was raised from 200 to 220 billion dollars and free cash flow fell to minus 7.6 billion dollars.
• Long term debt rose 81 percent to 119 billion dollars between 31 December and 31 March.

Debt rose 81 percent

How the build out is financed is the point analysts now watch most closely. The long term debt of Amazon rose 81 percent to 119 billion dollars between 31 December and 31 March.

That puts the group among a set of large technology companies financing the construction of data centres increasingly with borrowed money. An asset manager whose largest position is Amazon described the environment as marked by growing fatigue with the subject of artificial intelligence and by sudden questions about the sharply increased investment budgets.

Two large contracts in artificial intelligence

On the demand side the company can point to concrete deals. A project for Anthropic continues to ramp up. In addition an agreement with OpenAI worth 38 billion dollars was signed.

According to reports there are also talks with OpenAI about a stake, under which the company would use the Amazon chips.

These deals matter for reading the investment. They show that part of the new capacity is already contracted and is not being built on a hunch.

The share remains a laggard

Despite the operating performance the share has gained only around four percent this year. Apple reached about 23 percent over the same period.

Over five years Amazon stands at 60.8 percent, behind Walmart, which gained more than 130 percent. The S and P 500 rose 77.7 percent in that period.

The main reason for the restraint is regarded as the fact that the cloud division grew more slowly than the offerings of Microsoft and Google for a long time. That has changed lately. In the second quarter Google Cloud grew 82 percent, Azure 43 percent and the Amazon division 37 percent.

The group is currently valued at 28 times the profits estimated for the coming twelve months. Among analysts Amazon counts as the most likely candidate for the three trillion dollar mark in market value, which so far only Nvidia, Apple, Alphabet and Microsoft have reached.

Retail benefits from automation

Alongside the cloud the core business is also developing. According to the company, retail shows clear operating leverage from the investment in robotics and artificial intelligence. Rising revenue leads to disproportionately rising profits there, because a large part of the costs is fixed.

This week Amazon appears together with Micron and Alphabet on the list of a data service naming stocks where earnings surprises are likely.

Frequently asked questions

How fast is the Amazon cloud division growing

By 36.7 percent against the year before in the second quarter of 2026. For comparison, Google Cloud grew 82 percent and Azure 43 percent. For the business in artificial intelligence and for its own chips the group names an annual revenue run rate of more than 25 billion dollars each.

Why is free cash flow negative

Because the group raised its investment for the current year from 200 to 220 billion dollars. Free cash flow fell as a result to minus 7.6 billion dollars. Long term debt rose 81 percent to 119 billion dollars over the same period.

Is the new capacity already sold

Part of it is. A project for Anthropic continues to ramp up, and an agreement with OpenAI worth 38 billion dollars was signed. According to reports there are also talks with OpenAI about a stake, under which the company would use the Amazon chips.

This analysis is for information only and is not investment advice.