Amazon.com, Inc.

What they do

Operates online and physical stores offering retail products across dozens of categories, plus subscription services like Amazon Prime. Serves third-party sellers with fulfillment and selling programs and provides on-demand cloud computing services via AWS. Also manufactures and sells devices (Kindle, Echo, Ring, Blink, eero) and offers advertising services.

Revenue drivers

• North America segment — Retail, subscription, and advertising sales in the U.S. and Canada; Q2 2026 net sales were $116.2 billion, up 16% year-over-year.
• International segment — Retail, subscription, and advertising sales outside North America; Q2 2026 net sales were $42.2 billion, up 15% year-over-year.
• Amazon Web Services (AWS) — Cloud infrastructure and AI services; Q2 2026 net sales were $42.2 billion, up 37% year-over-year, representing a $169 billion annualized revenue run rate.
• Advertising — Sponsored, display, and video advertising programs; management cited 26% year-over-year growth in Q2 2026.

Recent performance

Q2 2026 net sales rose 20% year-over-year to $200.6 billion. Operating income grew 43% to $27.5 billion. Net income was $62.6 billion, or $5.75 per diluted share, including $53.4 billion of non-operating pre-tax other income primarily from investments in Anthropic. Trailing twelve-month operating cash flow increased 33% to $161.4 billion. Trailing twelve-month free cash flow was a $7.6 billion outflow, driven by a $66.1 billion year-over-year increase in property and equipment purchases, primarily for artificial intelligence.

Strategy

Investing heavily in AI infrastructure and custom silicon, including Trainium and Graviton5, and expanding AWS AI services such as Amazon Bedrock. Continuing to improve Prime delivery speeds, with over 40% more items delivered same-day or overnight in the first half of the year. Growing advertising and third-party seller programs across its stores.

Risks

• Intense competition — Amazon faces rapidly evolving, intense competition across retail, e-commerce services, cloud computing, devices, digital content, advertising, and logistics, including from competitors with greater resources or brand recognition.
• Tariff and trade policy exposure — Tariff and trade policies, along with resource and supply volatility including memory chips, could raise costs and disrupt Amazon's global operations.
• Large AI-related capital expenditures — A $66.1 billion year-over-year increase in property and equipment purchases, primarily for artificial intelligence, drove free cash flow to a $7.6 billion outflow and may not generate expected returns.
• Inventory and supply commitments — Inventory valuation and supplier commitments for electronic device components depend on uncertain demand forecasts; each additional 1% of inventory valuation allowance would result in roughly $405 million of additional cost of sales.

Outlook

Management expressed confidence in AWS momentum, noting AI and chips businesses each exceeded $25 billion annual revenue run rates, and said more is coming for customers in the second half of the year and beyond. The 10-Q cautions that actual results could differ materially due to foreign exchange fluctuations, tariffs, energy prices, memory chip supply, inflation, interest rates, and global economic conditions.