Amazon Web Services posted revenue of $42.232 billion in the second quarter of 2026, a 37% increase year-over-year that the company called its fastest growth in 18 quarters. The results landed alongside a statement from AWS CEO Matt Garman that has drawn wide attention from investors and analysts watching the artificial intelligence buildout.
Garman posted on X that "much of our capacity is already spoken for through 2027 and into 2028, and demand still significantly outstrips supply," according to a report by Yahoo Finance. He added, "We're going to keep building to keep up with what customers are asking for."
The claim reframes a debate that has been running through markets over whether hyperscaler spending on AI infrastructure is rational or approaching a peak. Garman's statement suggests AWS has already sold off a large portion of its next two years of capacity, which the company cited as justification for spending at a historic pace.
Capital expenditures at Amazon reached $54.208 billion in the second quarter alone, a 68.44% increase year-over-year. AWS operating margin came in at 39.4% for the quarter.
Amazon CEO Andy Jassy addressed the AI segment directly in the company's earnings materials, stating: "AWS is booming, growing 36.7% year-over-year in Q2, our fastest growth in 18 quarters, and our AI and Chips businesses each eclipsed run rates of more than $25 billion." Both the AI and Chips divisions are growing at triple-digit rates.
Garman also flagged a significant shift in the type of work being run on AWS infrastructure, specifically a move from training AI models to running them, a process called inference. Inference workloads tend to produce recurring, steady compute demand rather than the one-time bursts associated with training. That shift, if it holds, supports a more durable revenue base for AWS going forward.
UBS projects AWS growth will accelerate further to 48% next year as Amazon's Trainium chips scale up, with some contribution from an OpenAI relationship. Prediction markets are reflecting a similarly bullish read: Polymarket traders assign a 96.3% probability that Amazon's full-year 2026 capital expenditures will clear $190 billion.
Amazon shares have gained 20.1% over the past five trading sessions following the results.
The supplier chain is also registering the impact. Credo Technology reported revenue growth of 206%, Astera Labs shares are up 93% year-to-date, and Marvell Technology shares climbed 14%. All three companies have raised their outlooks alongside AWS's buildout plans.
