A：For Q2 2026, Amazon reported revenue of $200.6 billion, up 20% year over year, with an operating income of $27.5 billion, up 43% year over year.

A：AWS performed very strongly, with year-over-year revenue growth of 36.7%, the fastest growth in 18 quarters. It added over $4.6 billion in revenue, which is about 80% more than its largest increase ever. The current backlog stands at $496 billion, growing triple digits year over year. AWS is now a $169 billion annualized revenue run rate business.

A：Customers choose AWS for its broad capabilities, strong security, and operational performance. Growth in AI is driving core growth because of the use of poststrasse reinforcement learning and AI tool use, which is mostly done on CPUs versus AI accelerators. The Graviton chip, being the strongest CPU chip, offers up to 30% to 40% better price performance. Also, the need to store AI data in vector databases benefits AWS due to its broad and capable functionality in core infrastructure areas.

A：Bedrock is an offering from Amazon that provides a high-performance, cost-effective inference service. It offers the best selection of leading models with superior performance and security controls. Bedrock is continuing to grow very quickly and supports not only model building but also inference services.

A：Amazon's Quick AI work companion is a digital workload management service that helps with search and automation across various tools and services, including email, calendar, and custom workflows. It enforces existing access controls and can manage tasks like meeting scheduling, email drafting and sending, and CRM updates. In Q2, it added autonomous agents, a personalized activity feed, and 16 new integrations. Many companies have adopted it, and its usage grew significantly.

A：AWS Continuum is a service that discovers, prioritizes, validates, and remediates code vulnerabilities in a company's applications. It helps to address security vulnerabilities by scanning for them, using agents in each company's business context to prioritize vulnerabilities, reasoning through factors such as deployment and impact, and validating them in a sandbox. It also recommends the fix for any identified vulnerabilities.

A：Revenue growth for AI and machine learning is related to the adoption of AWS's products and services by a growing number of AI startups and larger companies. AWS offers chips with leading price performance in both AI and CPUs, as well as support from prominent AI labs like Anthropic and OpenAI. Companies such as Uber and Pinterest have adopted AWS's products, and AI startups like Neuro Robotics and others are also using them.

A：Graviton chips are expected to grow significantly, with revenue commitments increasing nearly three times quarter over quarter. Graviton 5 is growing nearly two times faster than Graviton 4 did. AWS has a strong partnership with Nvidia and plans to continue making AWS the best place to run Nvidia chips. This choice provides customers with competition and helps drive down the cost of inference.

A：AWS plans to invest approximately $200 billion in cash CapEx by 2026, with the majority of the investment supporting AI and AWS. The data centers and the servers and networking equipment are the two major parts of the investment. Data centers are capitalized two years before servers are put into service, and they generate significant revenue once operational, with the potential to monetize these data centers for over 30 years. Servers and networking equipment have a shorter cycle and can be purchased a few months before being put into service, allowing visibility into customer demand before triggering spend.

A：AWS manages the useful life of server equipment and data centers by planning for server economics to last at least 5 to 6 years, which aligns with the current practice of five-year term contracts for AI capacity. They aim to get at least 5 to 6 generations of server economics, with each subsequent generation having better overall economics. AWS also extends the useful life of this equipment without sacrificing customer experience and has a history of pulling forward break-even points and extending the life of equipment.

A：Data center construction leads to significant CapEx spending and can initially create free cash flow headwinds because data centers must be built before they can be monetized. However, once operational, they start generating revenue and provide a long-term income stream. This investment results in substantial free cash flow and return on invested capital as revenue growth outpaces incremental CapEx growth over time.

A：AWS anticipates future growth by investing more in cash CapEx, expecting to spend approximately $220 billion in 2026, up from a prior estimate of about $200 billion. This is driven by strong demand for AI, with current projections indicating a potential for a trillion-dollar annual revenue business. While not all demand can be met in 2026, the growth is expected to continue into 2027 and beyond, with significant revenue and free cash flow generation anticipated.

A：Recent developments in Amazon's retail business include adding a million new products, expanding its selection, and enhancing its ultra low price range. It offers everyday low prices, deep discounts during sales events, and has seen strong customer response to Prime Day. The grocery business is growing quickly, with perishables and non-perishables. Amazon Pharmacy's customer base has grown, prescription deliveries have nearly increased fivefold, and the number of customers has more than doubled. The delivery speed has been increased with same-day delivery options and Amazon Now, which offers delivery in 30 minutes or less.

A：Amazon is expanding its supply chain services by launching Amazon Supply Chain Services, allowing any business to move and deliver products using the same supply chain that supports Amazon. This service already has several large customers, including Procter & Gamble, 3M, and American Eagle Outfitters.

A：AmazonLens has been expanded to 10 additional countries, now available in 21 countries around the world.

A：Shoppers who click a sponsored prompt convert to a sale 48% more often and spend 21% more on average than those who don't click on sponsored prompts.

A：The NBA on Prime Video delivered strong viewership, with a peak of 6.5 million US viewers for Game 7 of the Eastern Conference semifinal, outperforming the previous year's broadcast. Prime Video viewership for the NBA more than doubled year over year, drawing 36 million global viewers for the series premiere of Off Campus in its first 12 days, making it Prime Video's number three top-viewed series debut. SOA Plus expanded to Germany, Austria, France, and Brazil, and hundreds of millions of customers used new Alexa experiences, driving business momentum with customers who use Alexa for shopping spending an average of over 40% more per order than those who don't.

A：The total worldwide revenue for the company was $200.6 billion, a 20% increase year over year, excluding the impact of foreign exchange. The reported income of $27.5 billion includes the timing shift of Prime Day into Q2 for most of our largest selling products.

A：The benefits recognized in the latest financial quarter were approximately $1.2 billion in expense reductions. This includes $600 million from tariff-related refunds received and another $600 million from the change in the fair value measurement of energy contracts, which primarily impacted the AWS segment.

A：In the second quarter, the North America segment's revenue was $116.2 billion, an increase of 16% year over year, while the international segment's revenue was $42.2 billion, an increase of 15% year over year, excluding the impact of foreign exchange. Worldwide paid units grew 17% year over year.

A：The fulfillment network is optimizing inventory placement, shortening shipping distances, reducing touches per package, and improving consolidation rates. It is expanding the deployment of robotics and automation and retrofitting facilities with the latest technology. The expected impact is to more than double the fleet of robotic arms like Cardinal and Sparrow by 2026, while lowering overall costs to serve despite higher transportation costs driven by fuel inflation and driver capacity limitations.

A：The company's investments in the second quarter were $53.1 billion in cash CapEx, primarily related to AWS and generative AI to support strong customer demand. The strategic reasoning is based on the belief in the potential of generative AI to drive long-term revenue and free cash flow, justifying the significant investment.

A：The company received approximately $600 million in Q2 due to the participation in the tariff-free fund process. Their teams managed to forward buy and pre-position inventory to avoid tariff costs and absorb the increased costs rather than passing them on to customers. They will only proactively contact and issue refunds to customers in specific circumstances where they can trace specific import charges.

A：Q3 net sales are expected to be between $197 billion and $202 billion.

A：The two areas driving the sequential deceleration in net sales growth from Q2 to Q3 are timing shifts related to Prime Day sales events, with the impact being more pronounced in Q3. Adjusted for Prime Day, the year-over-year growth would have been higher by nearly 400 basis points. The other factor is the timing of foreign exchange rates affecting Q3 operating income.

A：The sustainability of the 39% AWS operating margin in Q2 is attributed to growth in both revenue and margin expansion, especially given the size of the business. The margins have remained strong despite large investments, with a year-over-year improvement of 650 basis points. Factors contributing to profitability include disciplined efficiency gains, capacity optimization, and the management of fixed costs.

A：While AWS can have a wildly successful business without its own frontier model, as there is not one model that will rule the world, Amazon is pursuing its own frontier model for several reasons, including additional control over costs for their consumer applications, driving costs down for customers, prioritization control, and speed. Amazon uses Bedrock, which provides a selection of models with leading price performance and governance, and also to use their own models.

A：The company envisions that within the next few years, at least a half dozen models will be comparably good, all of which will be available in Bedrock. One of these will be the company's own model, which is being developed for prioritization and speed.

A：There is no specific information provided about the exact amount of capacity being added in the second half versus the first half. However, the company has been more open than its peers regarding gigawatts and adding capacity. For a detailed comparison, further context or data is needed.

A：The primary reasons for the significant growth in AWS's business include customers choosing AWS for its broadest functionality across Cloud Core and AI, its strong operational performance and security, and the ability for companies to consolidate their inference workloads and data in AWS, making it the preferred location for many businesses.

A：Besides AI, the core business is driven by an increasing number of enterprises building their transformation plans to move from on-premises to the cloud. This shift, coupled with the growth in AI and the use of CPU and cores with leading chip technology like Graviton, makes AWS an even more attractive choice for businesses.

A：The company is on pace to double its capacity and power capacity by the end of 2027 compared to 2025. This indicates an ongoing commitment to invest in data center capacity to meet the growing demand.

A：Due to the high demand for AI and existing production workloads, it is not clear if there will be a slowdown in long-lived data center investments in 2027. The company has not specified a timeline for selling tranum at some point to third-party data centers or the ROIC considerations versus core AWS loads.

A：The company views the demand curve for AI as very barbell-shaped, with AI labs consuming significant compute and successful generative AI apps like ChatGPT at one end, and enterprises deriving value from AI in cost avoidance and productivity at the other end. The largest segment is expected to be existing enterprise production workloads, which are anticipated to increasingly use inference. The company plans to continue investing in AI to maintain its leadership position, with the potential for a trillion-dollar revenue business for AWS.

A：The company is excited about its chip business, with over $25 billion in annual revenue. It has leading price-performance chips in both AI (Triton) and CPU (Graviton) spaces. The company has multi-year commitments from major AI labs and increasing customer interest in using Triton chips outside the cloud. There is a real chance that the company will provide standalone access to these chips in the future.

A：While the company is not providing specifics, the possibility of moving into the application layer and workplace productivity tools was mentioned, suggesting these could enhance the broader platform offering from infrastructure upwards.

A：The company has issued debt this year and continues to explore various funding options for future growth. At the time of the speech, there was no specific decision to share, indicating a flexible approach to capital sources.

A：Amazon Quick started as a coding service for intelligent AI assistants to help with business intelligence, summarization, and document analysis. It has evolved to manage email, Slack communications, and calendars more effectively. The feature has grown substantially within Amazon, with many employees using it, prompting the development of a more productive and integrated version.

A：Amazon Connect is used by major airline providers, leading banks, and healthcare companies. It has experienced significant growth, not only within Amazon but also among external enterprises that have implemented it on a large scale.

A：Continuum is a service that addresses the security concerns that arise with the use of AI. It helps enterprises understand, utilize models productively, find vulnerabilities in their code, design fixes, and deploy them. This service is aimed at managing the security risks associated with powerful AI models.

A：The reported RPO number indicates a massive expansion in future capacity, reflecting customer enthusiasm for AWS services. This growth is accounted for in CapEx projections, and the company expects to continue signing more deals and pursuing its market segment. Regarding supply chain inflation, most deals are based on signed agreements with set prices, which helps maintain stable return profiles despite cost inflation. New agreements are made by taking into account current costs.

A：The scaling of fast commerce services and the grocery business is showing positive trends in consumer adoption rates and overall spend. The company is experiencing growth in perishable sales, with a significant increase in the number of monthly active perishable customers and higher sales volumes for same-day orders containing perishables. The business is also benefiting from a new format of daily shops in urban settings. Geographically, Whole Foods Market locations are seeing outpacing growth compared to comparable grocers. Additionally, the strategy of offering mass brands and perishables is proving successful, particularly through the implementation of same-day perishable delivery in 2,300 cities across the US.