Amazon’s cloud computing division delivered stronger-than-expected financial results on Wednesday, surpassing analyst predictions as businesses increased their spending on artificial intelligence technology.
The company’s Amazon Web Services division reported first-quarter revenue of $37.6 billion, representing a 28% increase from the previous year. Financial analysts had projected a smaller growth rate of 25.08%, with revenue expectations of $36.61 billion, according to LSEG data.
These positive results come as Amazon, the leading global provider of cloud services, has strengthened investor confidence through recent strategic alliances with two prominent AI companies, OpenAI and Anthropic.
Just this week, Amazon announced the availability of OpenAI’s newest models and its programming tool, Codex, through AWS. This move capitalized on the weakening relationship between the ChatGPT developer and competing cloud provider Microsoft.
Additionally, Amazon recently finalized an agreement to invest as much as $25 billion in Anthropic, while the Claude AI developer pledged to spend over $100 billion on AWS services during the next decade.
These strategic moves, combined with Amazon’s earlier announcement that AWS AI services are producing more than $15 billion in yearly revenue, have contributed to a 14% stock price increase this year. This performance places Amazon among the top-performing companies in the elite “Magnificent 7” technology group.
The Seattle-based company has allocated approximately $200 billion for capital expenditures this year and continues working to convince investors that its AI infrastructure investments will yield quick returns.
In his recent shareholder communication, CEO Andy Jassy indicated that investments made in 2026 would likely generate revenue during 2027 and 2028.
However, the technology industry’s collective $600 billion AI spending plan for this year has strained company cash flows, creating some investor concern despite companies arguing the investments are essential to meet overwhelming AI demand that currently exceeds available computing resources.
Beyond cloud services, Amazon continues expanding its retail operations by extending same-day delivery to additional smaller communities and focusing more heavily on grocery delivery services to compete with retail giants like Walmart and Kroger.
