Cloud Computing Fuels Growth for Amazon and Alphabet

Amazon and Alphabet have both crushed expectations with their recent quarterly reports. Amazon's cloud business, known as AWS, made up 60% of its operating profits during Q2.

The two companies are taking a multifaceted approach to business, using profits from their primary business units to fund data center build-outs for their most exciting segment: cloud computing. Alphabet has the Google family of products under its umbrella, which is primarily an advertising business, and it's also getting into chip sales with its in-house designed Tensor Processing Unit.

Alphabet's revenue rose at a 24% pace in Q2, with its cloud division seeing revenue growth accelerate to an 82% clip. In contrast, Amazon delivered strong revenue growth of 20%, but its AWS saw only 37% growth.