Amazon: AWS is accelerating, and it is lending to its biggest customers

AWS is growing faster than it has in about five years and it earns most of Amazon's profit. In the quarter to September 2026 AWS revenue was $46.0B, up 39%, at an operating margin of about 39%, and the backlog of contracted revenue reached $578B, up from $496B a quarter earlier. Andy Jassy says AWS growth is projected above 40% in both 2027 and 2028, and the release names new agreements with Meta, NVIDIA, OpenAI, Salesforce and Oracle. Group operating income was $28.1B, and Q4 is guided to $28.5–33.5B. Conviction is MEDIUM for two reasons. The build is being paid for with debt: purchases of property and equipment were $77.3B in the quarter, 2026 cash capex is about $220B, trailing free cash flow was an outflow of $42.4B, and long-term debt rose to about $181B from $69B at the start of the year. And the demand is partly circular: at 30 September Amazon carried its Anthropic convertible notes at about $146.2B and its Anthropic preferred stock at about $92.5B, has made up to $20B of financing available to Anthropic, and has invested in OpenAI, both of which are large AWS customers. Amazon's nuclear supply agreement with Vistra at Comanche Peak links to MenFem's Vistra call. BULLISH, conviction MEDIUM, three years. This view was formed by MenFem's research process at Connor's request and adopted by him. The entry is the live US quote on 6 November 2026.