Even as Amazon posted strong financials for Q2 ended June 30 with net sales increasing 20 percent to $200.6 billion and operating income clocking $27.5 billion, up 43 percent Y-o-Y, a senior executive said the company is witnessing growing advertiser interest across its media and entertainment business.

CEO Andy Jassy, during the company’s second quarter earnings call on July 30, said Prime Video advertising and live sports were emerging as key growth drivers.

Jassy also highlighted the role of AI-powered advertising tools and new shopping experiences in boosting customer engagement and advertiser performance, according to a statement put out by Amazon on its website.

Speaking about Amazon Ads, the statement quoted Jassy as saying that  Sponsored Products remains the company’s largest advertising offering and continues to be a key driver of growth.

Amazon Ads generated $19.8 billion of revenue in Q2, up 26 percent year over year, powered by AI tools, conversational shopping, and multi-sport streaming strategies

He added that more shoppers were now discovering products through Amazon’s agentic and conversational experiences, including Alexa+ and Alexa for Shopping.

According to Jassy, shoppers who click a sponsored prompt convert to a sale 48 percent more often and spend 21 percent more on average than those who do not.

Highlighting the company’s media business, Jassy, as per the company statement, said Amazon continues to see growth and engagement in Prime Video Ads and live sports.

He noted that the company introduced more than 30 new advertisers to the NBA in its first year of coverage, while advertising inventory across ‘Thursday Night Football’, the NBA, WNBA and NASCAR sold out.

Jassy said advertisers were increasingly adopting multi-sport strategies, with brands advertising across multiple sports achieving 2.3 times higher unduplicated reach than single-sport advertisers.

He added that viewers who watch multiple sports generate 12 percent higher spending and place 17 percent more orders on Amazon.

On the technology front, Jassy said Amazon is making it easier for brands to create, launch and optimise full-funnel advertising campaigns through AI-powered tools, including Ads Agent.

The tool reduces campaign setup and targeting from hours to minutes, he said. According to Jassy, advertisers using Ads Agent targeting record 8 percent lower cost per impression and 6 percent lower cost per acquisition, and the service has been expanded to 11 new countries this year.

For the record, according to a company statement, Amazon’s net sales increased 20 percent to $200.6 billion in the second quarter. North America segment sales increased 16 percent year-over-year to $116.2 billion.

International segment sales increased 15 percent year-over-year to $42.2 billion. AWS segment sales increased 37 percent year-over-year to $42.2 billion. Operating income increased to $27.5 billion in the second quarter, compared with $19.2 billion in second quarter 2025.

North America segment operating income was $9.1 billion, compared with $7.5 billion in second quarter 2025. International segment operating income was $1.7 billion, compared with $1.5 billion in second quarter 2025.

Strongest Cloud Growth: Meanwhile, Amazon delivered its strongest cloud growth in more than four years and raised its annual capital spending forecast, bolstering its argument that heavy investment in AI is generating sufficient demand to warrant the outlays, a Reuters report stated on July 30.

The Q2 results helped answer a key question hanging ‌over Amazon and its Big Tech peers: whether hundreds of billions of dollars being poured into AI data centers and chips are producing adequate returns.

Amazon CEO Jassy said demand remained so strong that the company still lacked enough computing capacity to serve customers despite raising its capital spending forecast by 10 percent to $220 billion.

Revenue at its cloud computing unit, Amazon Web Services, jumped 37 percent to $42.2 billion in the second quarter ended June 30, handily beating analysts’ consensus estimate of a 31.21 percent increase, according to data compiled by LSEG.

He said the cost of purchasing memory chips was a prime factor in driving the company’s capital spending forecast higher.

AWS contract backlogs at the end of the quarter stood at $496 billion, up from $364 billion in the prior three-month period.

Amazon’s free cash flow turned sharply negative. The company burned $7.6 billion of cash on a trailing 12-month basis in the second quarter, compared to $18.2 billion in free cash flow a year earlier.

Jassy sought to explain the company’s massive capital outlay on the (investor) call. Amazon starts spending on data centers roughly two years before they open, ⁠which creates a period where cash is flowing out but revenue has not yet arrived, he said. (Andy Jassy’s image is a file photo)