AWS and Google Cloud: Profits vs Speed in Cloud Computing

Amazon's (AMZN) AWS and Alphabet's (GOOGL) Google Cloud are both investing heavily in cloud computing, but only one is generating significant free cash flow. In their Q2 FY2026 results, AWS reported revenue of $42.2 billion with an operating income of $16.6 billion and a 39% operating margin. This comes as AWS' backlog has reached $496 billion, roughly two and a half times the level in Q3 2025.

Meanwhile, Google Cloud's revenue was smaller at $24.77 billion but grew by an impressive 82% year-over-year. While Alphabet raised approximately $70 billion in combined equity and debt to cover its capex bills, Amazon covers its expenses through operating cash flow of $45.4 billion plus debt.

Andy Jassy said server investments break even in a little less than three years and then generate cash across a 30-plus year data-center life. On the other hand, Alphabet's speed advantage comes from 82% cloud growth paired with 34% companywide operating margin, meaning demand is compounding faster at Google Cloud.