Amazon Raises AWS Guidance by $5 Billion After 18% Q1 Revenue Gain
Amazon’s AWS unit accelerated revenue growth by 18% year-over-year in Q1 2026, driven by expanded enterprise AI deployments and new data center builds across Europe and Asia. Management raised annual AWS revenue guidance by $5 billion, offsetting slower North America retail sales and bolstering operating income outlook.
1. AWS Revenue Beats Expectations
Amazon Web Services posted Q1 revenue of $25.4 billion, up 18% year-over-year, outpacing consensus estimates of 15%. Growth was led by enterprise AI workloads and new cloud regions launched in Germany and Singapore.
2. Annual Guidance Upgraded
Management raised full-year AWS revenue guidance from $100 billion to $105 billion, citing stronger-than-expected contract renewals and increased usage of AI-optimized server instances. Operating income outlook for AWS was lifted by $1.2 billion.
3. Retail Segment Moderation
North American retail revenue rose only 4% in Q1, down from 7% in Q4, due to macroeconomic headwinds and promotional pullback. International retail sales remained flat, prompting a reevaluation of marketing spend.
4. AI and Data Center Investments
Amazon added two new data center regions and expanded existing facilities to support AI-driven services. Capital expenditures on infrastructure are expected to grow 10% this year, aligning with long-term cloud leadership strategy.