Amazon (AMZN): Options Priced a 4.6% Move Into Earnings, Stock Gapped 12.53%

Amazon reported second-quarter 2026 results on 30 July 2026. Options ahead of the report were priced for a 4.6% move. Shares gapped 12.53% at the next session's open, 2.72 times what was priced.

What Amazon reported

Revenue reached $200.6 billion, ahead of a $196.47 billion estimate, and earnings per share came in at $5.75. Net income was $62.6 billion, though $53.4 billion of that came from the mark-to-market value of Amazon's investment in Anthropic rather than from operating the business -- a distinction worth keeping straight, since the headline profit figure is not simply a read on how the retail and cloud operations performed that quarter.

The number that mattered more: AWS

Amazon Web Services revenue grew 36.7% year over year to $42.2 billion, ahead of a $40.54 billion estimate and well above the roughly 31% growth rate analysts had modeled going in -- the cloud division's fastest growth rate in 18 quarters. AWS operating income reached $16.6 billion, up from $10.2 billion a year earlier, at a 39.4% operating margin. Chief executive Andy Jassy said AWS "could become a $1 trillion annual revenue" business, citing demand across both AI workloads and traditional infrastructure.

Why the priced move undersold it

A 4.6% priced move is modest even by Amazon's standards, reflecting an assumption that a company this size reports incremental change most quarters. What it did not anticipate was AWS growth accelerating past what analysts themselves had modeled -- an acceleration at that scale, on a business already the size AWS is, is uncommon enough to reprice the stock well past a routine-quarter estimate.

What comes next

Amazon raised its full-year 2026 capital-expenditure guidance to about $220 billion to fund the data-center capacity behind that demand, an increase management said creates free-cash-flow headwinds in the near term; capacity for 2027 is already largely reserved, with some 2028 capacity spoken for as well. Third-quarter guidance calls for net sales of $197 billion to $202 billion and operating income of $22.5 billion to $26.5 billion.