Solid AWS revenue growth and margin expansion

亚马逊(AMZN)\r

Amazon reported 2Q26 results on 31 July (BJT). Revenue of US$200.6bn(+19.6% YoY, vs. +13.3% in 2Q25) came in 2% ahead of both our forecast andVisible Alpha (VA) consensus, driven by beats in North America (NA) and AWS.Reported operating profit (OP) rose 43% YoY to US$27.5bn. Excluding twoexpense-related benefits totaling US$1.2bn, OP of US$26.3bn was up 37% YoYand still ahead of consensus (US$23.7bn), driven primarily by AWS. AWSrevenue growth accelerated to 37% YoY (1Q26: 28%; 2Q25: 18%), 4% aheadof consensus. Management guided 3Q26E revenue to be in the range ofUS$197-202bn (+9-12% YoY) and OP to be US$22.5-26.5bn (consensus:US$25.4bn). We leave our 2026-2028E revenue forecasts broadly unchangedbut raise OP by 7-10% to reflect stronger-than-expected AWS marginexpansion. Our TP moves to US$301 from US$305, based on 17.2x EV/EBITDA(from 17.6x), in line with the three-year average trading range. Maintain BUY.\r

AWS: both revenue growth and margin expansion better thanexpectation. AWS revenue rose 37% YoY to US$42.2bn, with OPM of39.4%, up 6.5ppts YoY on: 1) efficiency gains; 2) capacity optimization; and3) tight control of fixed costs. Excluding a US$600mn benefit from thechange in fair-value measurement of energy contracts subject to derivativeaccounting, OPM of 37.9% was still 4.2ppts ahead of consensus. Cashcapex reached US$53.1bn (+69% YoY, +23% QoQ), and managementraised 2026E capex guidance to US$220bn (from US$200bn) on highermemory costs. Management defended the returns profile of the AWS buildout, noting that: 1) investment in servers and networking equipment takesslightly under three years on average to reach breakeven; and 2) serversnow carry a useful life of at least five to six years, with most AI capacitycontracted for terms of five years or longer. AWS backlog reachedUS$496bn, up 36% QoQ, which we see as continued support for cloudrevenue growth. Management reiterated that capacity remains insufficientto meet the demand in 2026, and expects the same dynamic to persist into2027, adding that the level of demand that Amazon already have for 2028is also striking.\r

North America and international OP broadly in line. NA revenue grew16.1% YoY to US$116.2bn (2Q25: +11.1%; 1Q26: +12.1%), 2% ahead ofconsensus, with OPM up 0.4ppts YoY to 7.9%. Excluding a US$600mntariff-related refund benefit, NA segment OP of US$8.5bn was broadly inline with consensus. International revenue rose 14.8% YoY to US$42.2bn,with OPM flat YoY at 4.1%; both were broadly in line with consensus.\r

Update on AI and silicon initiatives. In 2Q26: 1) Amazon's chip business(Graviton, Trainium and Nitro) reached a combined annual revenue run-rateof over US$25bn (1Q26: US$20bn), representing triple-digit YoY growth;and 2) AWS's AI business surpassed a US$25bn annual revenue run-rate,also growing at a triple-digit YoY rate