# Amazon’s AWS Growth Faces Earnings Test as AI Spending Pressures Cash Flow

By John Kim

Canonical URL: https://www.tokenpost.com/news/business/27424
Published: 2026-10-07T12:54:16.000Z
Updated: 2026-10-07T12:54:16.000Z
Section: Business

> AWS revenue rose 37% year over year to $42.2 billion in the second quarter, while trailing-12-month free cash flow turned negative at $7.6 billion.

Amazon’s rapidly growing cloud business is approaching a quarterly test as investors weigh AWS momentum against the cash burden of artificial-intelligence infrastructure spending.

Amazon shares closed at $256.29 on Oct. 6, 2026, and traded at $256.86 at 8:46 a.m. ET (12:46 p.m. UTC) on Oct. 7. Average 12-month price targets from different consensus datasets ranged from $321.63 to $331.53, with each dataset covering 59 analysts.

The company’s second-quarter results showed AWS remains the main earnings engine. AWS sales rose 37% from a year earlier to $42.2 billion, while operating income increased to $16.6 billion from $10.2 billion. AWS accounted for more than half of Amazon’s $27.5 billion in operating income.

Amazon President and CEO Andy Jassy said AWS grew 36.7% year over year in the quarter, its fastest growth in 18 quarters. Amazon also said its artificial-intelligence and chips businesses each exceeded $25 billion in annualized revenue run rates.

The cash-flow picture was weaker. Amazon’s trailing-12-month free cash flow was an outflow of $7.6 billion through June 30, compared with an inflow of $18.2 billion in the comparable period. Amazon attributed the decline primarily to higher purchases of property and equipment tied to artificial-intelligence investment.

The contrast between cloud growth and cash generation reflects the broader pressure from AI infrastructure spending, as companies expand computing capacity before the resulting revenue fully offsets the investment.

Amazon guided for third-quarter net sales of $197 billion to $202 billion and operating income of $22.5 billion to $26.5 billion. The company has not posted an official third-quarter earnings date on its investor-relations events page.

Recent published targets included $350 from TD Cowen, $360 from Rosenblatt and $385 from Tigress Financial. Those estimates vary by provider and methodology, reinforcing that the target-price range is not a single market consensus.

Investors are likely to focus on whether AWS can maintain its recent growth while Amazon continues funding AI infrastructure. The next earnings release will provide the company’s latest update on that balance.