Amazon’s cloud unit AWS grew 28% year-over-year to $37.6 billion in Q1 2026, accelerating from prior quarters as AI demand drives spending.
Amazon (NASDAQ: AMZN) shares fell over 9% in the past five trading sessions, extending a 3% decline on Friday amid a broader tech sell-off. The drop coincides with rising investor scrutiny over the company’s heavy spending to capitalize on artificial intelligence demand.
AWS, Amazon’s cloud computing arm and largest profit driver, reported $37.6 billion in revenue for Q1 2026, up 28% year-over-year. Growth accelerated from 24% in Q4 2025 and 20% in Q3, fueled by AI model training and deployment. CEO Andy Jassy noted the growth rate is rare for a business of AWS’s scale.
While AWS expansion bolsters Amazon’s long-term outlook, concerns persist over the sustainability of its spending. Advertising and retail profitability are rising, but capital expenditures remain elevated to support AI and cloud infrastructure.