Amazon's AWS cloud business posts fastest growth in 15 quarters, fueled by AI infrastructure demand

Amazon Web Services reported first-quarter net sales of $37.6 billion, representing 28% year-over-year growth and marking the fastest quarterly expansion for the cloud division in 15 quarters, according to the company's earnings announcement on April 29, 2026. AWS leadership attributed this acceleration to enterprise demand for AI computing resources, positioning the cloud unit as a critical supplier of infrastructure to the broader AI industry.

CEO Andy Jassy emphasized the unusual scale of growth on an already-large revenue base. He noted that the last comparable growth episode occurred when AWS was roughly half its current size. Jassy also highlighted the trajectory of AI-specific revenue, stating that AWS's AI revenue run rate over the first three years of the AI wave exceeded $15 billion, compared to AWS's $58 million revenue rate three years after its 2006 launch.

The growth came alongside a dramatic expansion in capital spending. Amazon reported a $59.3 billion year-over-year increase in property and equipment purchases, primarily connected to AI infrastructure build-out. This spending surge triggered a sharp decline in trailing twelve-month free cash flow, which fell to $1.2 billion from $25.9 billion in the first quarter of 2025—a 95% decrease.

Jassy framed the heavy upfront capex as necessary for maintaining competitive position in AI infrastructure. He explained that AWS must fund land, power, buildings, chips, servers, and networking equipment ahead of revenue monetization. He also signaled that capital spending growth would persist in the near term, tied directly to AWS revenue expansion rates. Jassy positioned these investments as temporary cash drains on assets with long useful lives—data centers lasting 30+ years and computing equipment lasting 5-6 years—and drew a parallel to AWS's earlier growth phases, suggesting the company expected favorable downstream returns.