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TechCrunch
Investors love AI, as long as you’re a cloud host
Amazon reported impressive second-quarter earnings, spurring investor enthusiasm, particularly around its cloud services. With a 37% rise in AWS revenue and substantial infrastructure investments, Amazon is aggressively positioning itself in the AI market. Despite rising capital expenditures, which contributed to negative cash flow for the quarter, Amazon's efforts in data centers and chip development show a long-term commitment to AI's growth potential. Other cloud providers like Microsoft and Google are following a similar trend, while companies like Meta struggle with investor skepticism due to unclear profitability.
MonitorConfidence: HighShort term horizon
Published 31 Jul 2026, 00:40 UTC3 min read
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Summary
TL;DR
- Amazon's net sales rose 20% and AWS revenue increased by 37%.
- Amazon's 2026 capex forecast raised from $200 billion to $220 billion.
- The company spent $173 billion on property and equipment in the last fiscal year.
- Amazon is investing in chips like the Trainium TPU and Arm-based Graviton.
- Investor sentiment favors cloud hosts over AI labs and startups.
Interesting facts
- Amazon's AWS revenue reached $42 billion for the quarter.
- Amazon experienced its first period of negative free cash flow this year.
- Cloud-hosting services like AWS are seen as critical in the AI stack.