Amazon's Hidden Profit Engine: Why AWS is the Key to Future Success

Amazon's AWS division is growing rapidly and making a significant contribution to the company's profits.

In the second quarter of this year, Amazon's North American commerce division generated $116 billion in revenue but only produced $9.1 billion in operating income, with an operating margin of 7.8%.

On the other hand, AWS' operating margin was a impressive 39%, making it a significantly more profitable business than e-commerce for Amazon.

In fact, 60% of Amazon's operating income came from AWS in Q2, highlighting its importance to the company's financial performance.

AWS revenue increased by 37% year over year in Q2, and with hundreds of billions of dollars invested in building out new data centers for increased computing capacity, expect AWS' revenue to jump even further.

As more computing capacity comes online and AWS usage explodes higher, Amazon's operating profits are likely to grow at a faster pace than its revenue, making it a hidden way for the company to outperform the market in the future.