AWS' $496 Billion Backlog Fuels Optimism About Amazon's Cloud Growth
Amazon's cloud division, Amazon Web Services (AWS), is expected to continue its rapid growth due to the increasing demand for computing capacity. The company's backlog of unfulfilled orders has reached $496 billion, up from previous years.
AWS' margins have also improved, with a 39% operating margin in Q2. This is significantly better than Amazon's commerce segments and accounted for 60% of the company's operating profits during that quarter.
CEO Andy Jassy has stated that AWS won't be able to meet demand for computing capacity in 2026, and the shortage will likely persist through 2027. Despite this, investors are optimistic about the company's future prospects, with its stock trading at a relatively low price-to-earnings ratio of under 25 times next year's expected earnings.