AWS Posts Record $42.2B Quarter, Amazon Raises Full-Year Capex to $220 Billion
Amazon's Q2 earnings were a blowout: AWS posted $42.2 billion in revenue, up 37% year over year — its fastest growth since 2021. Then CEO Andy Jassy said they are still not spending enough and raised full-year capex from $200 billion to $220 billion.
Three Key Takeaways
AWS crushed expectations. Wall Street expected $40.5 billion and 31% growth. The actual $42.2 billion and 37% left analysts scrambling to update models. On an annualized basis, AWS is now running at a $169 billion revenue rate. Amazon's total revenue crossed the $200 billion mark for the first time, hitting $200.6 billion, up 20% year over year.
AI and custom chips each passed $25B annualized. AWS's AI cloud services and its custom chip business (the Trainium line) have each cleared $25 billion in annualized revenue, both growing at triple-digit rates. AWS has raised its Q3 Trainium 3 ASIC server shipment targets by 20% to 30%. Meanwhile, AWS backlog — contracted work not yet delivered — swelled to $496 billion.
$220 billion in capex, and it is still not enough. On the earnings call, Jassy was blunt: even at $220 billion, capacity cannot keep up with customer demand. The extra $20 billion is mostly driven by rising memory and component prices. Amazon's stock jumped 9% to 12% after hours. The market's read was simple — spending more but earning even more, and demand outstripping supply beats the alternative.
WangDou's Take
What does $220 billion look like? It exceeds Vietnam's entire 2025 GDP. One company's annual capex outspends everything a nation of 100 million people produces in a year. And Jassy's exact words were "still not enough." This is not building a cloud — it is building the infrastructure for a parallel economy. The more interesting signal is the custom chip acceleration: bumping Trainium 3 shipment targets by 30% means Amazon is turning "we don't want to pay Nvidia rent" from a talking point into actual production volume. The $496 billion backlog means customers have already signed contracts and are waiting in line — in the cloud business, having customers queue up to hand you money is probably the most luxurious problem you can have.