Amazon Stock Poised for 22% Upside as AWS Drives Growth
Amazon's stock price has seen significant growth after its second-quarter earnings report. The company's cloud computing division, Amazon Web Services (AWS), is driving this growth with a 37% year-over-year increase in revenue during Q2.
AWS is thriving due to the high demand for cloud computing capacity, particularly from companies developing and deploying artificial intelligence applications. To meet this demand, Amazon is budgeting $220 billion on total capital expenditures this year, but CEO Andy Jassy has stated that the company will likely not have enough computing capacity to meet demand in 2026 and 2027.
The strong results from AWS are translating into significant profits for Amazon, with the division generating 60% of its parent company's operating profits during Q2. This trend is expected to continue, leading to outsize revenue growth as more infrastructure comes online.