Amazon’s cloud segment, AWS, posted a strong operating margin of 34.6% in Q3 2025, with $11.4 billion in operating income on $33 billion in revenue. The trailing 12-month margin hit 35.9%, stabilizing after AI investments. Revenue growth accelerated to 20%, reaching a $132 billion annual run rate.

Microsoft’s Intelligent Cloud segment maintained a 43% operating margin in Q1 2026, with 40% Azure revenue growth. Alphabet’s Google Cloud achieved a 23.7% margin in Q3 2025, up from 17.1% the previous year. Both face depreciation costs, with Microsoft showing higher margins and Google Cloud accelerating margin expansion.

Amazon’s stock has returned 9.2% in the past 6 months, outperforming the industry. Valuation-wise, AMZN is overvalued with a forward P/E ratio of 31.16X. The Zacks Consensus Estimate for 2026 earnings is $7.85 per share, up 9.46% from the year-ago quarter.

Amazon currently holds a Zacks Rank #2 (Buy), with potential for stock appreciation. Microsoft and Alphabet face AI investment pressures but maintain profitability. For more stock insights, check out Zacks Investment Research for top picks expected to double in value.

Read more at Nasdaq: Amazon’s AWS Margin Expansion Accelerates: More Upside for the Stock?