Amazon: A Deeper Look at the Cloud Growth Story (NASDAQ:AMZN)

Amazon's AWS division posted impressive 28% YoY revenue growth in Q1 2026 with a $364 billion backlog, driven by AI demand. However, the backlog heavily relies on spending commitments from Anthropic and OpenAI, which have combined annual revenues of only $72 billion against $27 billion in yearly AWS obligations. Amazon plans $200 billion in capital expenditures for 2026, resulting in negative free cash flow, creating uncertainty about the sustainability of these commitments.