AWS' Blazing Margin Fuels Amazon's Growth

Amazon's business is often associated with its e-commerce operations, but a significant portion of the company's revenue comes from Amazon Web Services (AWS), which boasts an impressive operating margin. In its second quarter (Q2) of 2026, AWS's operating profits rose at a remarkable 64% pace, resulting in a 39% operating margin.

This high operating margin allows AWS to grow profits rapidly and is a key driver of Amazon's financial performance. The company is investing heavily in AWS to meet growing demand, with management noting that the segment will continue to expand at its current rate of 37%.

AWS accounts for 21% of sales, but generates 60% of operating profits due to its superior operating margin. This disparity is a result of Amazon's ability to earn significantly more profit per dollar of revenue in AWS compared to its other business segments.