SEATTLE – Amazon delivered stronger-than-expected first-quarter results this week, beating Wall Street forecasts on both revenue and profit and reinforcing its position as one of the dominant players in cloud computing and artificial intelligence.
The tech and e-commerce giant reported earnings per share of $2.78, far above analysts’ expectations of around $1.63, while total revenue reached $181.5 billion, also beating the projected $177 billion. The results were among Amazon’s strongest in recent years and initially boosted investor confidence, although concerns over heavy spending tempered the market reaction.
A major driver behind the performance was Amazon Web Services (AWS), the company’s cloud division, which posted 28 percent annual growth — its fastest pace in 15 quarters.
AWS generated $37.6 billion in revenue during the quarter, benefiting from surging corporate demand for artificial intelligence tools, cloud computing and enterprise automation. Analysts say the acceleration confirms Amazon is capturing a larger share of the global AI investment wave.
Amazon’s AI-related chip business also continues to expand rapidly.
Chief Executive Officer Andy Jassy said Amazon’s custom semiconductor business, including Trainium and Graviton chips, has now surpassed a $20 billion annual revenue run rate, strengthening the company’s ability to reduce dependence on third-party chip suppliers such as Nvidia.
The company also reported record operating income of $23.9 billion for the quarter, reflecting stronger margins and improved efficiency across its retail and cloud businesses.
Its digital advertising division remains another major growth engine, generating more than $17 billion during the quarter and surpassing $70 billion in trailing twelve-month revenue.
Despite the strong operational performance, Amazon’s free cash flow fell sharply to $1.2 billion.
That decline was largely attributed to aggressive investments in data centers, logistics networks, AI infrastructure and satellite technology.
Capital expenditures reached approximately $43.2 billion in the quarter, nearly doubling compared to the same period a year earlier.
Amazon says the spending is part of a broader long-term expansion strategy, with total capital investments for 2026 expected to approach $200 billion.
The company believes those investments will support future growth in AI services, cloud infrastructure, logistics automation and global connectivity.
In its retail business, Amazon also showed resilience.
North American sales rose 12 percent to $104.1 billion, while profit margins improved as the company continued streamlining its delivery and logistics systems.
Looking ahead, Amazon projects second-quarter revenue between $194 billion and $199 billion, again above market expectations.
The company also expects operating income to range between $20 billion and $24 billion.
While the results confirm Amazon’s continued dominance in cloud and e-commerce, analysts note that the company is now entering a new phase centered on AI infrastructure and global technology expansion.
For investors, the question is no longer whether Amazon can grow, but whether its massive investments will produce even bigger returns in the years ahead.
The market’s initial response reflected that tension: strong confidence in Amazon’s long-term strategy, mixed with caution over the scale of spending required to stay ahead of rivals like Microsoft and Google in the global AI race.