Key Points
- Amazon net sales rose 17 per cent to $181.5 billion in Q1 2026
- AWS revenue grew 28 per cent to $37.6 billion, fastest in 15 quarters
- Anthropic investment contributed $16.8 billion pre-tax gain to net income
Amazon reported a 17 per cent increase in net sales to $181.5 billion for the first quarter of 2026, driven by accelerating growth in its cloud computing and artificial intelligence businesses.
The company’s cloud division, Amazon Web Services (AWS), posted revenue of $37.6 billion for the quarter ended 31 March, a 28 per cent increase from the same period last year. Amazon said this marked the fastest growth rate for AWS in 15 quarters.
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Net income nearly doubled to $30.3 billion from $17.1 billion in the first quarter of 2025. The figure includes a pre-tax gain of $16.8 billion from Amazon’s investment in Anthropic, the artificial intelligence company behind the Claude chatbot.
“AWS is growing 28 per cent on a very large base, our chips business topped a $20 billion revenue run rate, growing triple digits year-over-year,” Amaon CEO Andy Jassy, said in a statement.
AI Chip Business Crosses $20 Billion Run Rate
Amazon’s custom semiconductor business, which includes its Graviton processors for general computing, Trainium chips for AI model training and Nitro security chips, crossed $20 billion in annual revenue run rate. A run rate projects full-year revenue based on current quarterly performance.
The company said it deployed more than 2.1 million AI chips over the past 12 months. More than half of these were Trainium chips, Amazon’s purpose-built processors designed to train large AI models at lower cost than conventional graphics processing units.
OpenAI has committed to using approximately two gigawatts of Trainium capacity through AWS infrastructure to power its AI models, with deployment beginning in 2027, Amazon said. Anthropic will use up to five gigawatts of current and future Trainium chips to train its AI systems.
Segment Performance and Cash Flow
North America segment sales rose 12 per cent to $104.1 billion, while international segment sales grew 19 per cent to $39.8 billion. Excluding currency fluctuations, international sales rose 11 per cent.
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Operating income increased to $23.9 billion from $18.4 billion in the year-ago quarter. AWS contributed $14.2 billion of operating income, up from $11.5 billion previously. The North America segment generated $8.3 billion in operating income, while the international segment contributed $1.4 billion.
Operating cash flow rose 30 per cent to $148.5 billion for the trailing twelve months. However, free cash flow dropped sharply to $1.2 billion from $25.9 billion a year earlier. Amazon attributed this to a $59.3 billion year-over-year increase in capital expenditure, primarily on AI infrastructure.
The company said its advertising business reached over $70 billion in trailing twelve-month revenue. Unit growth in Amazon’s retail stores reached 15 per cent, which the company said was the highest since the end of pandemic-era lockdowns.
Your Questions, Answered
How much did Amazon earn in Q1 2026?
Amazon reported net income of $30.3 billion for the first quarter of 2026, nearly double the $17.1 billion it earned in the same quarter of 2025. This includes a $16.8 billion pre-tax gain from its investment in Anthropic.
How fast is AWS growing?
AWS revenue grew 28 per cent year-over-year to $37.6 billion in Q1 2026. Amazon said this was the division’s fastest growth rate in 15 quarters, or nearly four years.
What is Amazon’s Trainium chip?
Trainium is Amazon’s custom-designed processor built specifically to train large artificial intelligence models. Amazon says it offers better cost efficiency than conventional graphics processing units for AI workloads.
Why did Amazon’s free cash flow decline?
Amazon’s free cash flow dropped to $1.2 billion from $25.9 billion due to a $59.3 billion increase in capital spending, primarily on AI infrastructure including data centres and custom chips.