Amazon Stock Rides Cloud Growth Wave to $496 Billion Backlog

Amazon's stock has been relatively quiet in recent months, but its cloud unit, Amazon Web Services (AWS), is generating significant revenue and operating profit. In Q2 2026, AWS accounted for a fifth of Amazon's $200.6 billion in revenue, at $42.2 billion, and roughly 60% of the company's $27.5 billion in operating income, at $16.6 billion. The segment is accelerating, with revenue growth increasing to 36.7% year over year in June, up from 28% in March.

The AWS backlog stands at $496 billion, growing triple digits year over year, and most of its AI capacity is contracted for at least five-year terms. This means that Amazon has already secured significant revenue through long-term contracts, providing a tangible upside case. Management notes that free cash flow will stay under pressure until the data centers come online, but the increased cost of memory is also driving companies to move their on-premises infrastructure to the cloud.

The crossover point where returns become compelling occurs when revenue growth outpaces capital spending growth. While Amazon hasn't specified a date for this crossover, investors can track companies whose guidance keeps moving up to gauge whether Amazon stays on the right side of it. A screen of such companies is the cheapest way to monitor this relationship.