Amazon Web Services Backlog Surpasses $496 Billion, Cloud Margins Rise to 39%
Amazon has seen significant growth in its cloud computing division, Amazon Web Services (AWS), with a backlog of unfulfilled contracts reaching $496 billion. This represents more than double the amount from early 2026 and supports continued momentum for the company's revenue expansion. In Q2 fiscal year 2027, AWS reported its best performance in nearly five years, achieving a 37% sales increase and an operating margin of 39.4%, up over 500 basis points from last year. Amazon’s overall net income surged to $62.6 billion for the quarter, driven largely by a one-time gain but still exceeding adjusted earnings expectations. Despite concerns about high capital expenditures impacting free cash flow in Q2, CEO Andy Jassy explained that these investments are necessary to meet rising demand and will eventually lead to stronger revenue growth than capex spending as data centers come online. Amazon’s stock is currently trading at a historically low valuation of around 20 times earnings.
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Topics: Amazon AWS Capital Expenditures Operating Margin Revenue Growth