Amazon Q2 Earnings Surpass Expectations Despite AWS Underperformance

Amazon reported stronger-than-expected Q2 earnings, with revenue reaching $167.7 billion and EPS at $1.68, outperforming Wall Street estimates of $162.1 billion and $1.33 respectively. The company also provided optimistic Q3 guidance, projecting revenue between $174 billion and $179.5 billion, above analyst expectations of $173.2 billion.

Despite the positive results, shares dipped over 2% as AWS revenue of $30.8 billion merely met expectations, failing to match the cloud growth momentum demonstrated by rivals Microsoft and Google. Microsoft's Azure business hit $75 billion in fiscal 2025, propelling its market cap past $4 trillion, while Alphabet reported a 32% surge in cloud revenue.

The market reaction highlights investor focus on cloud computing performance as a key growth indicator for tech giants. Amazon's online store sales remained robust at $61.4 billion, demonstrating diversified strength beyond its cloud segment.