Amazon Q1 2026 Earnings: AWS Growth Accelerates as AI Spending Surges
Amazon's Q1 2026 revenue rose 17% and AWS cloud growth hit a 15-quarter high, but heavy AI spending pushed free cash flow near zero.
| Q1 2026 | Reported |
|---|---|
| EPS | $2.78 |
| Revenue | $181.52B |
Figures as reported by the company to the SEC for the quarter ended March 31, 2026. Analyst estimates are not part of a filing, so no comparison to expectations is shown.
Key takeaways
- Total revenue rose 17% year-over-year to $181.5 billion, powered by continued growth across Amazon’s retail and cloud businesses.
- Amazon Web Services (AWS), the company’s cloud-computing division, grew 28% to $37.6 billion in revenue — its fastest growth pace in 15 quarters — as businesses ramped up spending on AI-related cloud services.
- Operating income climbed to $23.9 billion from $18.4 billion a year earlier, pointing to improved profitability in the core business even as the company ramps up spending elsewhere.
- Reported net income of $30.3 billion was significantly boosted by a $16.8 billion non-operating, pre-tax paper gain tied to the rising value of Amazon’s investment in AI company Anthropic — a one-time accounting gain rather than cash from operations.
- Capital spending jumped to roughly $44 billion for the quarter, up sharply from about $25 billion a year earlier, as Amazon continues building out data centers and AI computing capacity.
- That spending surge pushed trailing-twelve-month free cash flow (cash generated after investments) down to about $1.2 billion, even though cash generated from day-to-day operations rose 30% over the same period to $148.5 billion — showing the AI buildout is consuming most of the cash the business brings in.
- Amazon’s custom AI chip lines (Graviton, Trainium and Nitro) surpassed a $20 billion annual revenue run rate, growing at triple-digit percentage rates, while usage of Amazon’s Bedrock AI platform saw customer spending climb 170% from the prior quarter.
- For the trailing twelve months, gross margin stood at about 51% and operating margin at about 12% — both healthy levels that show Amazon is keeping a solid share of sales as profit despite heavy AI investment.
- For the second quarter, Amazon guided to net sales of $194 billion to $199 billion and operating income of $20 billion to $24 billion.
- Shares dipped slightly in after-hours trading following the release, with some investors weighing the scale of AI-related capital spending against the quarter’s growth.
Q1 2026 in context
| Metric | Mar 2026 | Mar 2025 | Change |
|---|---|---|---|
| Revenue | $181.5B | $155.7B | +16.6% |
| Net income | $30.3B | $17.1B | +76.7% |
| Free cash flow | -$18.2B | -$8.0B | -127.0% |
| Diluted EPS | $2.78 | $1.59 | +74.8% |
| Gross margin | 51.8% | 50.6% | +1.3 pts |
| Operating margin | 13.1% | 11.8% | +1.3 pts |
| Net margin | 16.7% | 11.0% | +5.7 pts |
Figures for the quarter ended Mar 2026 and the quarter ended Mar 2025, as reported to the SEC.
Each company's quarter ending in calendar Q1 '26, as reported to the SEC. A peer that reported no revenue figure for that quarter is left out.
How the stock took it
Amazon.com, Inc. closed at $263.04 on Apr 29, 2026, the last session before the report, and at $268.26 on May 1, 2026, the first session after it — +2.0% across the report.
| Earlier report | Close before | Close after | Change |
|---|---|---|---|
| Oct 31, 2025 | $222.86 | $254.00 | +14.0% |
Closes from the market's daily record. Each figure spans the report date — from the last session that closed before it to the first that closed after — because a company may report before the open or after the close.
Sources: company report · reputable coverage · verified fundamentals