Amazon's Cloud Computing Division Poised for Explosive Growth

Amazon's stock surged 15% after its Q2 earnings report, but the company's cloud computing division, Amazon Web Services (AWS), is where the real growth story lies.

AWS' superior profit profile and rapidly accelerating pace of sales make it a key driver for Amazon's future success. The division contributed 60% of profit despite making up only 21% of total sales in Q2.

Amazon is investing heavily in its computing capabilities, with plans to spend $220 billion on data center capital expenditures this year. This will fuel the growth of AWS, which already saw sales rise 37% year over year and operating income increase 64% year over year.

CEO Andy Jassy believes AWS has the potential to generate $1 trillion in revenue someday, making it a key component of Amazon's future growth story.