AWS growth accelerates to 28% in Q1

Amazon said Amazon Web Services revenue growth accelerated to 28% in the first quarter and delivered operating income of $14.2 billion on revenue of $37.6 billion.

AWS drove profitability for what was a better-than-expected quarter from Amazon. The company reported first quarter net income of $30.3 billion, or $2.78 a share, on revenue of $181.5 billion, up 17% from a year ago. Amazon said its first quarter net income got a $16.8 billion boost from its Anthropic stake.

Wall Street expected Amazon to report first quarter earnings of $1.64 a share on revenue of $177.17 billion.

CEO Andy Jassy said AWS is putting up revenue growth at the fastest clip in 15 quarters. "AWS is growing 28% (our fastest growth in 15 quarters) on a very large base, our chips business topped a $20 billion revenue run rate (growing triple digits year-over-year)," said Jassy.

By the numbers:

• North American revenue was up 12% in the first quarter to $104.1 billion with operating income of $8.3 billion.
• International commerce operating income was $1.4 billion in the first quarter on revenue of $39.8 billion, up 19% from a year ago.
• AWS revenue rate is now north of $150 billion.
• AWS chips business, which includes Graviton, Trainium and Nitro, grew at triple-digit percentages.
• More than half of the company's 2.1 million AI chips deployed over the past 12 months were Trainium.

As for the outlook, Amazon projected second quarter sales between $194 billion to $199 billion, up 16% to 19% from a year ago. Operating income will be between $20 billion and $24 billion. The outlook assumes Prime Day drops in the second quarter.

AWS:

• AWS launches Amazon Quick, Connect family of business apps, OpenAI managed agents
• Meta gobbles up AWS Graviton capacity
• Anthropic, Amazon links tighten: Anthropic to spend $100 billion over 10 years on AWS capacity
• Amazon doubles down on Leo, acquires Globalstar for $11.6 billion
• Amazon CEO Jassy's 2025 shareholder letter: The big takeaways
• AWS launches Amazon Health Connect
• AWS lays out multicloud plans for Security Hub
• Amazon, OpenAI forge multi-faceted partnership: Dissecting the deal

Jassy said on an earnings call that the AWS AI revenue run rate is over $150 billion exiting the first quarter. He added the following:

• "We started the preview of Amazon Bedrock Managed Agents powered by OpenAI, the stateful runtime environment enabled any organization to build generative AI applications. We believe that modern agentic applications will be stateful, and this new technology will rapidly accelerate agentic AI adoption. OpenAI has said they're already seeing unprecedented demand for this new product, and we're seeing heavy customer interest as well."
• "The number of developers using Kiro more than doubled quarter over quarter and enterprise customer usage increased nearly 10x."
• "Our custom silicon business is now one of the top three data center chip businesses in the world. The speed at which we've gotten here is extraordinary, and we have momentum for our custom AI silicon."
• "AI is commonly seen as a GPU story, but the rise of agentic workflows, real time reasoning, co-generation, reinforcement learning and multi-step task orchestration is driving massive CPU demand. We will always have customers who want to run Nvidia on AWS. And we will also have a very large chips business ourselves. Customers always want choice."
• "We continue to be confident in the long-term CapEx investments we're making.
  The AWS CapEx we intend to spend in 2026 will be installed in future years. We have high confidence this will be monetized well. We already have customer commitments for a substantial portion of it, and that it will yield compelling operating margins and ROIC."