Amazon's cloud business revenue surged 37% in the second quarter, achieving the highest growth rate since 2021

Amazon's cloud business revenue growth in the second quarter significantly exceeded analysts' expectations, with a year-on-year increase of nearly 37%, marking the highest quarterly growth level since 2021.

The e-commerce giant disclosed in its earnings report released on Thursday that Amazon Web Services (AWS) revenue reached $42.23 billion for the quarter ending in June, while the consensus estimate from analysts surveyed by StreetAccount was $40.54 billion, showing a significant acceleration from the 28% growth in the first quarter.

The annualized revenue from AWS's artificial intelligence business and self-developed chip segment both surpassed $25 billion, achieving more than double the growth compared to last year.

In the global cloud computing market, Amazon continues to lead all its peers in scale. Microsoft disclosed on Wednesday that Azure and other cloud services revenue growth was 43%, up from 40% in the March quarter; the Windows maker claimed that over the past 12 months, Azure and cloud business cumulative revenue exceeded $100 billion, while Amazon's corresponding cloud business revenue reached $148.4 billion.

Alphabet announced its earnings report last week, revealing that Google Cloud's quarterly revenue surged by approximately 82%, nearing $25 billion, with a growth rate of 63% in the first quarter. Over the past twelve months, this segment's revenue approached $78 billion.

Evercore analysts Mark Mahaney and Greg Melich wrote in a research report on Monday: "The absolute dollar increase in Google Cloud's quarterly revenue is nearly impossible for peers to catch up with, and there may be a structural shift in market share, which could cause slight concerns for some investors." The two analysts gave Amazon stock a "buy" rating.

AWS continues to contribute substantial profits to its parent company: in the second quarter, the segment's operating profit was $16.62 billion, significantly higher than the consensus estimate of $13.62 billion from StreetAccount, with an operating profit margin of 36.8%, which is more advantageous compared to Google Cloud's 35.6% operating profit margin. Currently, nearly 61% of Amazon's overall operating profit is generated by AWS.

Like its competitors, Amazon is rapidly and massively investing in data centers equipped with AI computing power chips to meet customer demand for computing power. The company's capital expenditures in the second quarter reached $54.21 billion, a year-on-year increase of 68%, also exceeding the market consensus estimate of $49.355 billion.

AWS announced two significant partnerships this quarter: it will launch a managed OpenAI large model service; and it signed a three-year framework agreement with Meta, which will procure hundreds of thousands of Amazon Graviton self-developed processors for use