AWS just posted its fastest growth in 18 quarters! Amazon's Q2 revenue hit $200.6 billion, up 20% year-over-year, with operating income at $27.5 billion, a 43% increase. AWS revenue reached $42.2 billion, up 37% YoY, beating market expectations of $40.6 billion. This pushed AWS's annualized revenue run rate to $169 billion. Amazon CEO Andy Jassy shared that AWS's AI business now has an annualized revenue run rate exceeding $25 billion, maintaining triple-digit growth. For context, if 37% YoY growth for AWS doesn’t sound impressive, remember that in recent quarters, AWS was only growing in the 20% range. Amazon has raised its 2026 capital expenditure forecast from $200 billion to $220 billion. Jassy noted that the majority of this spending will go toward AI. However, the significant capital investment has turned free cash flow negative over the past 12 months, with a net outflow of $7.6 billion. Amazon's Q2 earnings once again prove that large-scale investments in AI infrastructure are driving growth in its cloud business.