Stocks
Amazon's Cloud Business Booms Amid Growing Demand
Amazon's AWS segment is booming, with operating income up 63% year-over-year and revenue up 37% in the second quarter of 2026. This growth is driven by robust AI and chip businesses.
The company expects AWS revenue to eventually reach $1 trillion, which suggests a long runway for growth. With 85% of global IT spend still on-premises, there's significant room for expansion.
Amazon is attractively priced due to its outstanding capital allocation and deliberate investment cycle, which has led to temporary free cash flow depression.