AWS Dominance Powers Amazon's Stock, Says Analyst

Amazon's Amazon Web Services (AWS) is a crucial part of its business, accounting for 21% of sales in Q2 2026 but producing 60% of operating profits. This is due to AWS's impressive 39% operating margin, which is significantly higher than the company's North American and International commerce segments.

AWS's operating profit rose by a remarkable 64% during Q2 2026, resulting in this high margin. In contrast, Amazon's North American and International commerce segments combined to account for 79% of total sales but only 40% of operating profits.

Amazon is heavily investing in infrastructure to support AWS's growth, which is expected to reach 37% in the current year. Management has noted that the company is facing a 'compute-constrained state,' meaning it won't have enough capacity to meet demand in both 2026 and 2027.