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

Amazon's AWS division grew revenue 28% year-over-year in Q1 2026 and holds a $364 billion backlog, but the cloud giant faces a cash crunch tied to its largest AI customers. Anthropic and OpenAI together carry $27 billion in annual AWS spending commitments while generating just $72 billion in combined revenue, raising questions about payment sustainability as Amazon pours $200 billion into capital expenditures this year.

The capex surge has pushed Amazon into negative free cash flow for 2026. The AWS backlog, while large on paper, is concentrated among AI startups whose revenue bases may not support the multi-year cloud contracts they've signed. Anthropic and OpenAI account for a material portion of those commitments, creating counterparty risk if either company's funding or revenue trajectory falters.

Amazon shares face a test as investors weigh AI-driven cloud demand against the cash required to build out infrastructure. The company is betting heavily that model training and inference workloads will justify the spend, but the timing mismatch between capital outlays and customer payment capacity is widening.