Amazon Web Services shows strong growth, and the stock price is expected to achieve the largest single-day increase in 11 years
Amazon Web Services (AWS) reported a 36.7% year-on-year revenue growth in the second quarter, reaching $42.2 billion, exceeding expectations and driving the stock price up 13.7% in early trading, potentially marking the largest single-day increase in 11 years. Analysts believe AWS has reached a growth inflection point, and management is confident in capital expenditure efficiency and profitability. Although there is still a gap to the trillion-dollar revenue target, market confidence has significantly improved
Amazon.com, Inc. (AMZN) rose 13.7% in early trading on Friday, and if it holds until the close, it will mark the largest single-day gain since April 24, 2015. This surge is attributed to its cloud business, Amazon Web Services (AWS), which reported a 36.7% year-over-year revenue increase in the second quarter, reaching $42.2 billion, exceeding market expectations and achieving the fastest growth rate in 18 quarters.
Analysts pointed out that AWS has finally achieved the long-awaited growth inflection point, and Amazon is at a fundamental turning point, with both the pace of capital expenditure digestion and profitability better than market concerns. Amazon CEO Andy Jassy stated that AWS is "very likely" moving towards the goal of $1 trillion in annual revenue. However, analysts expect AWS revenue for fiscal year 2026 to be $169.7 billion, indicating a significant gap.
Amazon CFO Brian Olsavsky mentioned during the earnings call that AWS's profitability is not coincidental but stems from discipline, efficiency improvements, and capacity optimization, while the company has consistently maintained strict control over fixed costs.
The impressive performance of AWS and the management's guidance have been described as "exceeding everyone's expectations." The market has shown confidence in Amazon's ability to convert capital expenditures into financial returns, driving a strong rebound in the stock price. If the day's price increase is maintained, it will be the company's best trading day since 2015
