AWS Backlog Hits $496 Billion While Cloud Margins Surge to 39% Making Amazon a Must-Own Growth Stock

AMZN's AWS backlog has doubled to $496 billion, and cloud operating margins have climbed to 39.4%, anchoring a bullish case after what the article calls the company's best quarter in more than four years.

Q2 2026 delivered 20% revenue growth, with AWS sales up 37%. The margin print and the backlog figure together point to demand that is both large and profitable, a combination that supports the growth narrative behind the stock.

The bear case centers on spending. Capital expenditures of $220 billion and negative Q2 cash flow are the main concerns the article flags. Investors are being asked to fund a heavy build-out before the cash returns show up in free cash flow.

Valuation is the counterweight. AMZN trades at 20x earnings, near 10-year lows, per the article. Interpretation: a multiple that low alongside 37% AWS growth suggests the market is pricing in spending risk more than growth risk, leaving room for a rerating if capex converts into revenue.