AWS Posts Fastest Growth in 18 Quarters Driven by AI Demand

Amazon Web Services (AWS) has just posted its strongest revenue growth in nearly four and a half years, a key highlight for the tech giant. As of June 30, AWS reported a customer backlog of $496 billion, up significantly from $364 billion three months earlier and marking a triple-digit percentage increase year-over-year. This surge underscores the massive demand for cloud computing services, particularly as AI adoption accelerates.

The robust backlog is driving substantial capital expenditures for Amazon and other hyperscalers, with expectations of $220 billion in spending this year. Chief Financial Officer Brian Olsavsky attributed the growth to customers rapidly transitioning to the cloud to harness AI benefits. AWS's revenue growth in the second quarter was the fastest in 18 quarters, reflecting this heightened demand.

However, there are risks to consider. Earlier in 2026, both Anthropic and OpenAI signed $100 billion multi-year deals with AWS, but these AI labs are expected to generate revenue far below their spending levels. This funding gap could pose challenges for Amazon in the future.

Before investing in Amazon, potential buyers should weigh these factors carefully. The Motley Fool's Stock Advisor team did not include Amazon in their latest top 10 stock picks, suggesting they see stronger opportunities elsewhere.