Amazon Web Services' revenue growth accelerated to 37% year over year in the second quarter of 2026, while its operating margin reached 39%. AWS had a backlog of nearly $500 billion and generated 60% of Amazon's operating profit that quarter.
Amazon is on course to spend about $220 billion on capital expenditures this year, nearly all of it for data centers. The article says AWS' backlog is growing at a triple-digit percentage rate year over year as new AI workloads increase demand for computing capacity.
CEO Andy Jassy told investors Amazon would not be able to build computing capacity fast enough to meet demand in 2026, and that the shortage would likely persist through 2027; the company was already seeing demand for 2028. The Motley Fool author recommends Amazon shares, arguing that the growth potential is not fully reflected in the stock price.
