Amazon hits $2.6 trillion as AWS growth accelerates to 28%

Amazon.com Inc. commanded a $2.6 trillion market capitalization as of July 2, sitting on 10.76 billion shares at a closing price of $242.67, as its cloud business reaccelerates and reshapes the company's valuation narrative.

"The parts of Amazon growing fastest are now the ones with the highest margins, and the empire built on retail is being repriced as an artificial intelligence infrastructure business," the company said in its Q1 2026 earnings commentary.

Revenue landed at $181.52 billion in the first quarter, up 16.61 percent year over year. Earnings per share came in at $2.78 against a $1.653 consensus estimate, a 68.18 percent beat and the fifth consecutive EPS surprise. Net income of $30.25 billion included $16.8 billion in pre-tax gains from Anthropic holdings, a non-recurring item. Operating income reached $23.85 billion, up 29.6 percent year over year, with the corporate operating margin at 13.1 percent.

AWS generated $37.59 billion in revenue, growing 28 percent — the fastest pace in 15 quarters — at an operating margin of 37.7 percent. Amazon's custom chip business, spanning Graviton, Trainium and Nitro, crossed a $20 billion annual run rate with triple-digit year-over-year growth. Advertising services contributed $17.24 billion in the quarter, up 24 percent, now running at a trailing rate above $70 billion. Unit growth in stores hit 15 percent, the highest reading since the end of COVID lockdowns.

The company's AI infrastructure backlog underscores the scale of demand. AWS has locked in roughly 2 gigawatts of Trainium capacity for OpenAI through 2027 and up to 5 gigawatts for Anthropic, with Meta also on the customer list. Amazon Bedrock processed more tokens in Q1 than in all prior years combined, and customer spend on Bedrock grew 170 percent quarter over quarter.

Of the analysts covering the stock, 15 rate it Strong Buy, 47 rate it Buy, four rate it Hold and none rate it Sell, with a consensus price target of $312.99. Shares are up 6.9 percent over the past week and 5.13 percent year to date, but down 5.4 percent over the past month. The stock trades at 32 times trailing earnings and 31 times forward earnings, alongside quarterly earnings growth of 74.8 percent and return on equity of 24.3 percent.

Amazon guided Q2 2026 revenue to $194 billion to $199 billion, or 16 percent to 19 percent growth, with operating income of $20 billion to $24 billion against a year-ago figure of $19.2 billion. That guidance assumes Prime Day falls in Q2 2026.

The $2.6 trillion price tag is sustainable only if AWS maintains its acceleration — and right now it is doing the opposite of decelerating. The near-term catalysts on the calendar, including Prime Day, the Q2 earnings report and the start of a 1 million-plus Nvidia GPU deployment later this year, will test whether the AI infrastructure narrative can pull the multiple higher. For long-term holders, the question is whether the second-largest company in America is still compounding like a growth company at a $2.6 trillion market cap. This quarter says yes.

This article is for informational purposes only and does not constitute investment advice.