AWS Growth Hits 37% as Amazon Raises 2026 Capex to $220 Billion

Amazon's cloud business delivered its strongest growth in 18 quarters, pushing the company's shares up as much as 15% on Friday as investors rewarded what CNBC called a clear «post-earnings AI winner.» AWS revenue rose 37% year-over-year to $42.2 billion in Q2, well above the roughly 31% consensus, and the company raised its 2026 capital expenditure forecast by 10%, from $200 billion to $220 billion, for AI infrastructure including data centers and custom chips.

Demand Still Outrunning Supply

CEO Andy Jassy told analysts the company could not fully meet 2026 demand even at the higher spend level, and that much of 2027's AWS capacity is already reserved. AWS's contract backlog grew to $496 billion from $364 billion a year earlier. «The infrastructure investments are meeting market demand rather than outpacing it,» said Forrester analyst Tracy Woo, cited by CNBC.

The quarter came with a cost: Amazon posted negative free cash flow of $7.6 billion over the trailing twelve months, versus positive $18.2 billion a year earlier, as the AI buildout consumes cash faster than cloud revenue converts.

The Cloud Monetization Test

The rally contrasted sharply with Apple, which fell 7–9% on Friday despite beating headline numbers — revenue of $109.42 billion, up 16.4%, and iPhone revenue up 21.7% to $54.25 billion — because its September-quarter guidance of 9–11% growth missed the ~12% analysts expected (LSEG). Apple cited a severe memory-chip shortage and competition for manufacturing capacity. The divergence underscored July's investor pattern: punishing AI capex without visible returns, while rewarding clouds that convert spending into revenue.