--- title: "Amazon's Q1 revenue and net profit both exceeded expectations! AI bets pay off: AWS surged 28%, reaching a three-year high, with AI budget aiming for $200 billion this year" type: "News" locale: "en" url: "https://longbridge.com/en/news/284659492.md" description: "Amazon's financial report shows that Q1 revenue was $181.52 billion, a year-on-year increase of 16.6%, exceeding expectations by $4.35 billion; earnings per share were $2.78, surpassing expectations by $1.13. Net profit was $30.255 billion, a year-on-year increase of 77%. AWS sales reached $37.6 billion, a year-on-year increase of 28%, marking a three-year high. Amazon's investment in AI is significant, with an expected AI budget of $200 billion for the year" datetime: "2026-04-29T23:41:04.000Z" locales: - [zh-CN](https://longbridge.com/zh-CN/news/284659492.md) - [en](https://longbridge.com/en/news/284659492.md) - [zh-HK](https://longbridge.com/zh-HK/news/284659492.md) --- # Amazon's Q1 revenue and net profit both exceeded expectations! AI bets pay off: AWS surged 28%, reaching a three-year high, with AI budget aiming for $200 billion this year The Zhitong Finance APP noted that Amazon (AMZN.US) exceeded expectations in its spending this quarter to expand data center capacity, driving its cloud business to achieve the fastest sales growth in over three years. The financial report shows that Amazon's revenue in the first quarter reached $181.52 billion, a year-on-year increase of 16.6%, surpassing expectations by $4.35 billion; earnings per share were $2.78, exceeding expectations by $1.13. In the quarter ending March 31, Amazon's net profit was $30.255 billion, up 77% from $17.127 billion in the same period last year. Operating profit increased from $18.4 billion in the same period last year to approximately $23.9 billion. **Amazon stated that its spending on property and equipment in the 12 months ending March 31 was $151 billion—an increase of $57.9 billion compared to the same period last year.** This move aims to capture an increasing market share from leading AI startups Anthropic PBC and OpenAI. **Sales of Amazon Web Services (AWS) reached $37.6 billion in the first three months of 2026, a year-on-year increase of 28%. AWS accounts for about one-fifth of Amazon's total revenue and contributes most of its operating profit. This is the highest growth rate since the second quarter of 2022.** ![image.png](https://imageproxy.pbkrs.com/https://img.zhitongcaijing.com/image/20260430/1777504890113350.png?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg) In recent months, Amazon has invested in OpenAI and Anthropic, requiring these labs to commit to spending over $100 billion on AWS services in the coming years as part of the deals. These partnerships help alleviate investor concerns about slowing AWS growth and worries about Amazon's lack of blockbuster consumer-grade AI products that can compete with OpenAI's ChatGPT, Anthropic's Claude, or Alphabet's Gemini. **Amazon CEO Andy Jassy has stated that the company's target spending this year is approximately $200 billion—a 56% increase over 2025—primarily for data centers, including those customized for AI services. In the first quarter, spending on property and equipment surged to $44.2 billion, exceeding analysts' estimates.** **Due to these expenditures, Amazon's rolling free cash flow over the past 12 months fell from $25.9 billion a year ago to $1.2 billion by the end of the quarter.** Amazon's e-commerce business still contributes the largest share of the company's revenue, and Jassy continues to focus on reducing delivery times for consumers. During this period, online sales grew by 12%, reaching approximately $64.3 billion, higher than analysts' average expectations of $62.7 billion In addition, Amazon closed its Fresh grocery stores and cashier-less Go convenience stores this quarter, marking its latest retreat in the Amazon-branded physical retail business. Advertising revenue grew by 24% to $17.2 billion, exceeding the average expectation of $16.9 billion. Investors are closely watching the growth rate of the company's advertising business, as it helps improve the profitability of its e-commerce operations. ## Huge Growth Potential for Trainium Chips After the earnings report was released, Amazon, which rose about 1.3% on Wednesday, initially turned negative in after-hours trading, dropping nearly 4% at one point, but then turned positive during the earnings call, rising over 5%. During the earnings call, CEO Andy Jassy emphasized why clients like OpenAI and Anthropic choose Amazon to meet their artificial intelligence needs. He noted that the chip business grew by 40% in the first quarter. Notably, **Jassy stated that the chip business, as an independent company, could generate $50 billion in revenue annually. "Our custom chip business is now among the top three data center chip businesses globally."** Initial investor concerns focused on AI capital expenditures significantly exceeding expectations, free cash flow being squeezed, and EPS being boosted by investment gains from Anthropic; the focus then shifted to AWS accelerating, strong revenue guidance for the second quarter, and the short-term growth certainty brought by moving Prime Day earlier. During the earnings call, Amazon confirmed that Prime Day would move from July to June. Jassy stated that in terms of capital expenditures, the company believes that high AWS spending will be well monetized and sufficient to offset the negative impact on free cash flow in the short term. Jassy mentioned that Amazon has increased the variety of perishable food items and expanded delivery options, which has raised the average e-commerce shopping basket amount. ## Strong Second Quarter Earnings Guidance Amazon's guidance for the second quarter is also strong. The company expects net sales for the second quarter to be between $194 billion and $199 billion, representing a year-over-year growth of 16% to 19%, with a midpoint of $196.5 billion, significantly higher than the market expectation midpoint of $189.15 billion. Based on the midpoint of the guidance, Amazon expects second-quarter revenue to grow by 17.2% year-over-year, which is quite strong, but it should be noted that the company assumes Prime Day will occur in the second quarter, so part of the incremental growth comes from changes in promotional timing. The operating profit guidance is between $20 billion and $24 billion, compared to $19.2 billion in the same period last year. If we only look at the upper end of the range, it is indeed higher than the market expectation of $22.86 billion; however, the midpoint calculation of $22 billion is below that expectation. 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