Amazon post-earnings: my second-biggest position crushed analyst expectations 🚀 $AMZN
Today is exactly one of those days when it shows why it pays to hold quality companies long term.
My portfolio is up roughly 3.35% today, its value has pushed above $88,000 USD and Amazon alone added about $1,290 USD to it during today’s session.
Amazon is my second-biggest holding and after these results I can say one thing:
As a long-term shareholder I am completely satisfied.
Not only because of today’s stock gain. Amazon didn’t just barely beat expectations where it mattered most. It literally crushed them.
Amazon beat analysts across the report
✅ Revenue: 200.6 billion USD
Analysts expected around 197.0 billion USD. Amazon delivered about 3.6 billion USD more, which represents a beat of roughly 1.8%.
For a smaller company that might not look remarkable. But for Amazon and quarterly sales north of 200 billion USD it’s a huge difference. Total revenue also grew 20% year over year.
✅ Operating income: 27.5 billion USD
Analyst expectations were around 23.5 billion USD. So Amazon beat them by about 4 billion USD, roughly 17%.
For me this is one of the most important numbers in the entire release. It shows Amazon is no longer growing by revenue alone but turning a bigger portion of its turnover into real operating profit.
Operating income jumped 43% year over year, more than twice as fast as revenue.
✅ AWS revenue: 42.2 billion USD
Wall Street was looking for around 40.5 billion USD. AWS therefore beat consensus by about 1.7 billion USD, or more than 4%.
✅ AWS growth: +36.7%
Analysts expected growth of about 31.2%. Amazon beat the expected growth pace by roughly 5.5 percentage points.
AWS also recorded its fastest growth in the last 18 quarters.
✅ AWS operating margin: about 39.4%
Expectations were around 33.8%. So Amazon topped consensus by more than 5 percentage points.
AWS generated operating income of 16.6 billion USD, about 64% higher year over year. AWS is therefore not only a growth story, it remains an extraordinarily profitable engine for the entire company.
✅ GAAP EPS: $5.75
Consensus was roughly $1.82, so on paper the beat exceeds 200%.
We need to be fair here though. Net income included about $53.4 billion USD of non-operating pre-tax income, largely from a mark-up of Amazon’s investment in Anthropic.
That’s why the EPS of $5.75 can’t be seen as a normal, repeatable quarterly earnings level. In my view the core business metrics – operating income, AWS, advertising and operating cash flow – are far more important.
AWS absolutely exploded
The biggest positive of the results was undeniably AWS.
✅ Revenue 42.2 billion USD
✅ Growth +36.7%
✅ Prior quarter growth +28%
✅ Fastest growth in the last 18 quarters
✅ Operating income 16.6 billion USD
✅ Operating income growth roughly +64%
✅ Operating margin about 39.4%
That’s exactly what I needed to see as a shareholder.
Amazon is investing massively in data centers, chips, electrical capacity and the whole AI infrastructure. But this quarter clearly showed that there is real demand for the new capacity and the investments are starting to translate into faster growth and higher profit.
AWS is growing faster than the market expected and at the same time maintains exceptional profitability.
AI and custom chips are turning into huge businesses
Andy Jassy announced two more very important numbers:
✅ The AWS AI business has already surpassed an annualized revenue run rate of 25 billion USD
✅ The custom chip business has also passed an annualized revenue run rate of 25 billion USD
Both areas are growing at triple-digit rates.
Amazon is therefore profiting from more than just renting cloud capacity. It’s building an entire AI ecosystem:
AWS infrastructure,
custom Trainium and Graviton chips,
the Bedrock platform,
databases,
AI agents,
developer tools,
security products,
partnerships with the largest AI companies.
Hundreds of thousands of customers already use Bedrock and more customers were added in the last six months than in its first two years combined. Moreover customers spent more through Bedrock in the second quarter than during all prior quarters put together.
Advertising continues to show strong growth
Another big positive was advertising.
✅ Advertising revenue grew 26%
✅ It reached about 19.8 billion USD
In my opinion Amazon has one of the most valuable ad platforms in the world.
It knows not only what people search for but also what they actually end up buying. Advertising is therefore another high-margin engine that can boost the company’s profitability long term.
It wasn’t just the cloud that was strong
Other parts of Amazon also performed well.
✅ North America revenue rose 16% to 116.2 billion USD
✅ North America operating income hit 9.1 billion USD
✅ International revenue grew 15% to 42.2 billion USD
✅ The international segment generated operating income of 1.7 billion USD
✅ Amazon achieved record delivery speeds for Prime members
✅ Items delivered same-day or next-day increased by more than 40%
That’s important because the Amazon investment thesis doesn’t rest solely on AWS. The retail and logistics ecosystem itself is steadily becoming more profitable and efficient.
Operating cash flow is brutally strong
Another number that pleased me greatly as a shareholder:
✅ Operating cash flow over the last 12 months: 161.4 billion USD
✅ Year-over-year growth: +33%
This demonstrates that Amazon’s main business is generating record amounts of cash.
Free cash flow over the same period, however, swung from positive 18.2 billion USD to negative 7.6 billion USD.
The reason isn’t a weaker core business. Amazon increased net investments in property and equipment by about 66.1 billion USD year over year, primarily because of AI infrastructure.
Capex alone exceeded 54 billion USD during the quarter.
That is currently the biggest risk to the whole thesis.
Amazon is investing astronomical sums and it must prove that this money will generate sufficient returns.
But in my opinion this quarter provided the first very strong evidence:
✅ AWS +36.7%
✅ AWS operating income +64%
✅ AWS margin roughly 39.4%
✅ AI and chip businesses run-rating above 25 billion USD annualized
✅ Operating cash flow +33%
The investments are massive but their results are already visible.
Guidance wasn’t risk-free
Amazon expects third-quarter revenue between 197 and 202 billion USD, while analyst consensus was about 203.9 billion USD.
At first glance that looks like lighter guidance. However Prime Day this year was included in the second quarter. Amazon noted that after stripping out the Prime Day impact from both periods the expected year-over-year growth in Q3 would be nearly four percentage points higher.
The company also expects operating income between 22.5 and 26.5 billion USD, compared with 17.4 billion USD a year ago.
The guidance therefore isn’t perfect, but it’s also not as weak as it looks without context.
My view as a shareholder
Amazon is my second-biggest holding and after this report I see no reason to change anything.
On the contrary, my investment thesis has only strengthened.
✅ Revenue beat expectations by roughly 3.6 billion USD
✅ Operating income beat expectations by about 17%
✅ AWS significantly surpassed expected growth
✅ AWS accelerated to its highest growth in 18 quarters
✅ AWS margin handily beat consensus
✅ Advertising grew 26%
✅ Operating cash flow rose 33%
✅ AI and custom chips are already becoming tens of billions in revenue
✅ Retail segments remain profitable and more efficient
The stock jumped as much as 9% in after-hours trading after the results. The market got an answer to the most important question:
Are Amazon’s massive AI investments delivering real results?
After this quarter my answer is an unequivocal yes.
Today Amazon significantly helped pull my entire portfolio higher. But as a long-term shareholder I’m not satisfied just because of one green day.
I’m satisfied because the company confirmed exactly why I own it.
AWS is accelerating, margins remain high, advertising is growing, retail is improving and the AI investments are starting to generate real returns.
How do you rate Amazon’s results? Is it still an interesting buy after this brutal report, or has today’s move already priced in much of the good news?
