Amazon.com (NASDAQ:AMZN) reported financial results for the first quarter ended March 31, 2026, delivering a significant beat on the bottom line as the company’s cloud and artificial intelligence strategies began to yield outsized returns.
Total net sales rose 17% to $181.5 billion, compared with $155.7 billion in the prior-year period, driven by a reacceleration in cloud demand and steady growth in its core retail segments.
The headline figure for the quarter was a massive jump in net income, which surged to $30.3 billion, or $2.78 per diluted share, from $17.1 billion in the first quarter of 2025.
This result was substantially bolstered by a $16.8 billion pre-tax gain included in non-operating income, stemming from the rising valuation of Amazon’s strategic investment in AI startup Anthropic.
Amazon Web Services (AWS) emerged as a standout performer, with sales increasing 28% year-over-year to $37.6 billion.
The segment’s operating income rose to $14.2 billion, maintaining its position as the primary driver of the company’s consolidated operating profit.
The acceleration in AWS growth reflects a broader trend of enterprise customers increasing their cloud commitments to support generative AI workloads.
The company's retail operations also showed sustained momentum.
While North America sales increased 12% to $104.1 billion, with operating income rising to $8.3 billion, international sales climbed 19% to $39.8 billion (up 11% on a constant currency basis).
Meanwhile, the company’s focus on the artificial intelligence "arms race" was visible in its cash flow metrics.
Free cash flow for the trailing twelve months decreased to $1.2 billion, down from $25.9 billion a year ago.
The decline was primarily driven by a nearly $60 billion increase in capital expenditures for property and equipment, net of proceeds.
These investments are almost exclusively directed at expanding data center capacity and specialized hardware to support the surging demand for AI services.