US stock markets are seeing a significant pre-market surge in the memory chip sector, driven by a tech giant's earnings report. Amazon (NASDAQ: AMZN) shares are rallying more than 12% in pre-market trading after reporting a robust performance in its cloud business for the second quarter, fueled by a surge in corporate AI spending.
The e-commerce and cloud computing behemoth released its second-quarter financial results. The report shows that Amazon generated $200.6 billion in revenue for the quarter, a 20% increase year-over-year. Operating profit jumped 43% to $27.5 billion, while net income soared to $62.6 billion, a massive 244% leap from the $18.2 billion reported in the same period last year.
A key highlight was the performance of Amazon's cloud unit, AWS, which recorded its fastest growth rate in nearly 18 quarters. Revenue from AWS reached $42.232 billion, a 37% year-over-year increase that surpassed analyst expectations. The division's operating margin stood at an impressive 39.4%, far ahead of its major cloud competitors.
CEO Andy Jassy revealed two crucial figures during the earnings call: AWS's AI business and its proprietary chip business both have achieved an annualized revenue run rate exceeding $25 billion, each recording triple-digit percentage growth. Jassy also noted that AWS is experiencing strong growth in both AI and non-AI areas, with its order backlog reaching a record high of $496 billion. This figure does not yet include a potential deal worth over $100 billion with Anthropic, suggesting the actual demand could be even higher.
Jassy stated that AWS is thriving and underpinning much of Amazon's growth. "We have long believed that AWS could grow into a business with hundreds of billions of dollars in revenue. Now, we believe its revenue scale will at least double from that baseline," he said. To support this growth, the company has raised its full-year capital expenditure guidance from $200 billion to $220 billion, with the majority of funds directed toward AI and data center infrastructure. "Even with this increased spending, we will not be able to meet all of next year's demand, and I believe this supply shortage will persist into 2027," Jassy added.
Meanwhile, the memory chip sector is also showing strong momentum in pre-market trading. SK Hynix is up over 7%, while SanDisk, Western Digital, Intel, and Marvell Technology are all trading more than 5% higher. This follows a historic day in South Korea, where the KOSPI index surged 17.91% on July 31, its largest single-day gain ever. SK Hynix hit the daily price limit, surging 30% for the first time in its history. Samsung Electronics also jumped 26.81%, pushing its market capitalization back above $1.2 trillion.
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