Amazon (AMZN) reported first quarter revenue and earnings per share that topped Wall Street estimates, with AWS posting its fastest growth in 15 quarters as the e-commerce giant continues its massive artificial intelligence build-out.
Amazon stock initially rose after the report, then fell as much as 7% before recovering near Wednesday’s closing level.
The company reported earnings per share of $2.78, up from $1.59 a year ago. Revenue was $181.5 billion, up from $155.7 billion in the same quarter last year.
Analysts had expected earnings per share of $1.62 on revenue of $177.2 billion, according to Bloomberg consensus estimates.
Amazon’s all-important AWS cloud business generated $37.6 billion in revenue, ahead of estimates for $36.7 billion. AWS revenue excluding foreign exchange grew 28%, above expectations for 25.7% growth.
“AWS is growing 28% (our fastest growth in 15 quarters) 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 [trailing 12-month] revenue, and unit growth in our Stores reached 15% (the highest since the tail end of covid lockdowns),” Amazon CEO Andy Jassy said in a statement.
That acceleration is central to the Amazon story this quarter. Investors have been looking for evidence that the company’s AI infrastructure buildout is translating into faster cloud growth after Amazon’s roughly $200 billion capital spending plan pressured the stock following its prior earnings report.
The company’s AI demand story also got more support from new customer commitments. Amazon said OpenAI committed to consume about 2 gigawatts of Trainium capacity through AWS beginning in 2027, while Anthropic secured up to 5 gigawatts of current and future generations of Amazon’s Trainium chips. The company also said it signed a deal with Meta (META) to deploy tens of millions of AWS Graviton cores.
But the spending ramp is still weighing on free cash flow. Amazon said free cash flow fell to $1.2 billion for the trailing 12 months, down from $25.9 billion for the trailing 12 months ended March 31, 2025. The company said the decline was driven primarily by a $59.3 billion year-over-year increase in property and equipment purchases, reflecting investments in artificial intelligence.
The company issued second quarter revenue guidance of $194 billion to $199 billion, above expectations for $189.2 billion. That implies growth of 16% to 19% from the same period last year.
But Amazon’s second quarter operating income outlook came in light. The company expects operating income of $20 billion to $24 billion, compared with $19.2 billion in the second quarter of 2025. The midpoint of that range, $22 billion, is below analysts’ expectations for $22.9 billion.
