Amazon (AMZN +4.82%) delighted investors with 20% year-over-year revenue growth in the second quarter. Its cloud platform did particularly well, capturing headlines with 37% year-over-year revenue growth. It was only a few quarters ago that Amazon Web Services' revenue growth rate was decelerating and in the low double digits.
The narrative has shifted tremendously thanks to artificial intelligence, but it wasn't just cloud computing that drove results. These are some of the other big wins from Amazon's second quarter that investors may be overlooking.
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Online advertising continues to accelerate
Cloud computing and the online marketplace are the first things people think of when they think of Amazon, but the tech giant has turned itself into a top online advertiser. Revenue from its ads reached $19.8 billion in the second quarter, which was a 26% year-over-year improvement.
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Key Data Points
That was almost 10% of total revenue, and ads also come with higher profit margins than e-commerce. It explains why operating income went from $19.2 billion in Q2 2025 to $27.5 billion in Q2 2026. It's a 43% year-over-year increase. Net income grew more, but it includes Amazon's Anthropic investments, making that metric an unreliable gauge this quarter.
Amazon has been using ad agents to help businesses plan, launch, and manage advertising campaigns more effectively. The company said its AI agents "turn hours of setup and targeting into minutes." Ad agents have produced an 8% lower cost per impression and a 6% lower cost per acquisition compared to ad campaigns that did not use these AI agents.
The AI and chips businesses both earn more than $25 billion per year
Two new businesses have emerged thanks to Amazon's AI investments. It has an AI segment that focuses on software like AI agents. Its chip business centers around Trainium chips. It sells cloud compute access on these Trainium chips to leading AI companies. Anthropic and OpenAI have both made multi-year, multi-gigawatt commitments for these chips, with smaller AI start-ups also adopting these chips.
Both businesses reached $25 billion annual revenue run rates. That's more than a $50 billion combined annual revenue run rate, which represents a triple-digit year-over-year growth rate.
Granted, $50 billion per year is still a small portion of total revenue. It comes to roughly $12 billion per quarter, barely exceeding 5% of Amazon's Q2 revenue. However, these relatively small parts of the business are growing quickly and can have a more meaningful impact on overall results in the future.
Physical AI is helping Amazon in the workplace
Amazon has been using robots in its warehouses for years, but a big announcement in Q2 suggests that the robots are improving quickly. The tech leader launched the next generation of Proteus, an autonomous robot that performs tasks in Amazon fulfillment centers and moves goods that are up to 1,300 pounds.
That capacity is a big upgrade from 900 pounds, the previous model's limit. Breakthroughs in generative AI also let the robot operate throughout the warehouse instead of in designated areas. These robots can also process conversations and follow directions based on real-time requests.
The next-gen Proteus helped Amazon set record delivery speeds for Prime members in the first half of the year, with 40% more items delivered the same day or overnight.
Not only does this advancement let Amazon operate more efficiently, but it can also serve as a precursor to the company's humanoid robot efforts. While Proteus slides on the ground and isn't designed as a humanoid robot, Amazon's acquisition of Fauna Robotics earlier this year shows that it is paying close attention to the industry.
The tech advancements with Proteus, combined with the early-stage humanoid robots Fauna Robotics creates, can position Amazon as a leader in this small but growing market. Once humanoid robots are commercialized, they can become a major segment for Amazon. The company is preparing for this opportunity now so it can secure a large market share in the future.
