"They want their AI inference to reside near their other applications and data, and more of it resides in AWS than anywhere else."
He added that financial returns on AI investments are tracking favorably compared to the historical trajectory of core cloud services.
"We see the margins and returns in AI tracking what we saw with Core at the same point of evolution, actually a little ahead," Jassy said.
Analysts viewed the results positively. "This was really a home run for Amazon," said Arun Sundaram, Senior Vice President at CFRA Research.
He noted that the cloud unit's scale has expanded dramatically while maintaining operational momentum. "This growth rate justifies the spending," Sundaram added.
"AWS is now running at about a $170 billion annual revenue run rate — that's more than four times larger than it was in 2019."
In other segments, North American retail sales increased 16 percent, while international revenue rose 15 percent. Advertising revenue climbed 26 percent to $19.8 billion.
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For the third quarter, Amazon projected revenue growth between 9 percent and 12 percent, factoring in foreign exchange headwinds and the timing shift of its annual Prime Day event into the second quarter.
