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AWS growth is a key test for whether Amazon’s AI spending pays off

Analysts at TD Cowen forecast AWS revenue growth of 35.5% year over year in Q2, up from 28.4% a year ago, ahead of Amazon’s July 30 earnings.

Reported · Written up by our desk · Previews

For much of the year, investors have focused on whether Amazon’s AI infrastructure spending will translate into measurable growth, with the debate centered on whether AWS can convert its capex into results.

Ahead of Amazon’s next earnings report on July 30, TD Cowen is expecting a sharp acceleration in AWS revenue growth, forecasting 35.5% year over year in the second quarter versus 28.4% in the same period last year. The firm also expects Amazon retail sales to strengthen, pointing to two major tests for the strategy.

TD Cowen’s view is that easing supply constraints is helping drive the faster AWS momentum, as newly available capacity is coming online and converting into revenue tied to generative AI workloads. The firm argues the shift would directly address concerns that Amazon was investing ahead of demand rather than meeting demand it could already see.

If AWS growth lands near the forecast, it would represent a decisive change versus the narrative that cloud growth had plateaued, according to the note referenced by the analysis. The outcome could be a key data point for investors weighing whether the AI buildout is starting to pay off.

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