Amazon's Accelerating Cloud Growth Outpaces Microsoft

Amazon and Microsoft are two of the largest cloud computing providers in the market, but which one is more attractive to investors? According to a recent analysis, Amazon's cloud business has been growing at an accelerating rate, with its revenue growth rate increasing from 28% in Q1 to 24% in Q4 2025. In contrast, Microsoft Azure's growth rate has remained relatively constant, with a growth rate of 43% in Q4 2025, but only slightly higher than the 40% and 39% growth rates in the previous two quarters.

Another key factor that sets Amazon apart from Microsoft is its operating margin. During Q2, Amazon's cloud business had an impressive operating margin of 39%, which is likely higher than Microsoft Azure's. This means that as Amazon's cloud business grows, it will not only drive revenue growth but also increase profits.

Microsoft on the other hand, does not break out individual segments' operating margins in its public reports, so investors can only estimate Azure's operating margin based on other cloud computing firms. While Microsoft has been investing heavily in expanding its cloud capacity, the growth rate of Azure may not be enough to drive significant profit growth.

Considering these factors, Amazon appears to have a more attractive cloud business than Microsoft, with accelerating revenue growth and higher operating margins. This makes it a better investment opportunity for those looking to capitalize on the growing demand for cloud computing services.