Amazon reports 15% stock surge on 64% income rise

Amazon’s stock jumped 15% in a single day after the company reported second-quarter earnings, marking one of the biggest one-day gains in its history. The surge came as investors bet big on Amazon Web Services, the cloud computing arm that now powers much of the tech industry’s growth. The company also lifted its profit forecast, signaling that years of heavy spending on data centers are finally paying off. Analysts say this is just the start of what could be a long upward run for Amazon’s shares.

The jump reflects deep confidence in AWS, which now brings in more profit than Amazon’s entire retail business. AWS sales rose 37% in the last year while its operating income surged 64%, far outpacing growth in Amazon’s online stores. The reason? Cloud computing is the backbone of artificial intelligence, and every major AI company relies on AWS to rent computing power to train and run their models. Demand is soaring, and Amazon is spending $220 billion this year alone to build the infrastructure to meet it. CEO Andy Jassy has said AWS could one day reach $1 trillion in annual revenue, a figure that would make it one of the most profitable businesses on earth.

That kind of growth would dwarf Amazon’s core retail operations. Even with AWS already pulling in $148 billion in the past 12 months, the division’s profit margin sits at a stunning 39%. If it hits $1 trillion in sales while keeping that margin, AWS alone would generate $391 billion in operating profit—more than the combined profits of most Fortune 500 companies. That scale would cement Amazon’s dominance not just in cloud computing, but in the AI revolution that’s reshaping industries from healthcare to finance.

Investors are rushing in now, fearing they’ll miss out on the next big tech story. The same “conviction signal” that flashed before Nvidia’s explosive rise in the 2010s is now lighting up for Amazon, with some analysts calling it a once-in-a-decade opportunity. The question isn’t whether AWS will keep growing—it’s how much higher Amazon’s stock could go before the market fully prices in its AI-powered future.