Amazon’s cloud business is surging — and so is its capital spending
Amazon's cloud division, AWS, experienced its fastest growth in 15 quarters with a 28% year-over-year increase in net sales to $37.6 billion, driven by demand from the AI boom. CEO Andy Jassy emphasized that the company is making substantial capital expenditures to support this growth, investing in infrastructure like data centers and chips ahead of revenue generation. While these investments have significantly reduced Amazon's free cash flow, the company anticipates long-term financial returns from the expanding AI-related cloud demand.
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Amazon was one of several tech giants that on Wednesday beat Wall Street’s first-quarter earnings expectations, offering more financial evidence that the AI boom continues to reward companies that supply the picks and shovels. Amazon’s cloud business is the latest example. Amazon Web Services, buoyed by its role in fueling the AI boom, saw its net sales increase 28% year-over-year, climbing to $37.6 billion, the company said Wednesday. It was the fastest growth rate for AWS in 15 quarters, Amazon president and CEO Andy Jassy said during the company’s earnings call. Jassy attributed AWS’ success to its role in providing compute to the AI industry. “It’s very unusual for business to grow this fast on a base this large.
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