Amazon’s AWS Strength Outpowers Its Tailwainds So I Accumulate Alex Sirois Tue, November 10, 2026 at 8:45 AM EST 5 min read AMZN +1.13% WMT -0.27% GOOGM +0.07% Explore stocks on Coinbase Trading disclosure Trading disclosure The above button links to Coinbase. Yahoo Finance is not a broker-dealer or investment adviser and does not offer securities or cryptocurrencies for sale or facilitate trading. Coinbase pays us for certain activity generated through this link. Prices displayed are informational.
Amazon (AMZN) AWS growth accelerated to 39%, its fastest in nearly 5 years, backed by a $578 billion backlog that supports the growth case.
Walmart (WMT) trades at a richer P/E with thinner margins than Amazon, while Alphabet (GOOGL) funds growth by issuing stock that dilutes shareholders.
Amazon's roughly $220 billion of 2026 capex leaves it holding expensive idle capacity if AI demand cools.
Building a portfolio and living off one are two completely different skills, and almost nobody teaches the second. This problem is what The Definitive Guide to Retirement Income helps, and it is free today. Read more here. (Sponsor)
Amazon (NASDAQ:AMZN) delivered a third-quarter earnings report that strengthened its cloud growth story. AWS grew 39% year over year, its fastest growth in nearly 5 years. As long as the cloud engine speeds up like this, the growth case stays intact.
AWS is Amazon's profit engine, and it keeps speeding up as it gets bigger. Growth ran 24% in Q4 2025, 28% in Q1, 37% in Q2 and 39% in Q3. Q3 revenue reached $45.98B, and AWS operating income climbed to $17.77B from $11.43B a year earlier.
The runway looks long. AWS carries a $578 billion backlog, and Bedrock token volume rose nearly 17x. CEO Andy Jassy said "We believe that AWS can grow north of 40% in each of 2027 and 2028 and be a trillion-dollar revenue business in the next five to 10 years."
First, margins. Consolidated operating margin hit 13.9%, the company's highest ever, and operating income rose 61.15% to $28.08B, even with a Prime Day calendar shift reducing retail growth by roughly 400 bps.
Second, custom silicon. The chips business grew at triple-digit percentages, Graviton and Trainium commitments rose more than 20x, and customers saved more than $2 billion in Q3 alone. Owning the chip brings down AWS's cost structure for years.
Many successful investors eventually reach the same moment. The saving is done, the portfolio is built, and the question quietly changes from how much can I grow this to how much can I take out? Get that second question wrong and decades of good investing can come apart in a handful of years.
That is exactly what The Definitive Guide to Retirement Income helps answer. It covers what your retirement could actually cost, which income sources are worth using, and the withdrawal math that decides whether the money lasts. It is free today from Fisher Investments. Read More Here ›
Third, the balance sheet. The leverage ratio sits at 0.372, net debt to EBITDA at 0.454 and interest coverage at 35.17. Amazon pays no dividend, so returns come from share price compounding, and the stock has returned 622.4% over ten years.
Walmart (NASDAQ:WMT) is the retail name readers reach for first. It trades at a P/E of 46 against Amazon's 37, with an operating margin of 4.2% versus Amazon's 11.16%. Walmart carries a richer multiple with lower margins.
Meanwhile, Alphabet (NASDAQ:GOOGL) looks cheaper, and Google Cloud grew 103%. Alphabet funds its expansion partly by issuing stock, including a $49.6 billion net equity raise in Q2, and posted Q3 free cash flow of -$9.07 billion. Every new share it sells dilutes existing shareholders' claim on future profits.
Capital spending. Amazon plans roughly $220 billion of 2026 cash capex and significantly more in 2027. Q3 capex jumped 120%, trailing free cash outflow reached $42.4 billion, and AI margins run below core AWS margins. Should AI demand cool, Amazon would hold expensive idle capacity.
That expansion has to be powered and cooled by somebody other than the hyperscaler writing the check, which is why the suppliers behind the data centers keep showing up in our free report on seven AI infrastructure names that aren't chipmakers.
The cash engine keeps pace with that risk. Operating cash flow rose 19.4% to $42.42B, AWS margin held at 38.7% despite the AI mix, and management cites visibility into capacity commitments for 2027, 2028, and some of 2029.
Approximately 85% of global IT spending still sits on premises. Q4 operating income guidance of $28.5B to $33.5B compares with $25.0B a year ago, and management expects advertising growth to return to the high teens. Each quarter, the cloud business gets larger and faster at once, and the key signal to keep an eye on is whether that engine holds its pace.
(Sponsor) Most people spend their entire working lives focusing on one thing: growing a pile of money. Then they retire and discover the skill they actually need is close to the opposite. Turning that pile into steady income, year after year, through good markets and bad, without ever running out.
It may be the least discussed and most consequential transition in personal finance, and plenty of otherwise careful investors walk into it with no real plan. That is exactly what The Definitive Guide to Retirement Income helps answer. It is a free guide from Fisher Investments covering what your retirement will really cost, where the cash flow should come from, and how much you can safely withdraw each year. Learn more here. Learn More Here ›
Contact editorial@247wallst.com for any questions or corrections.
