Amazon Posts Record 16.7% Profit Margin as AWS Grows 28%
Amazon’s AWS segment posted 28% year-over-year revenue growth in Q1, contributing to the company’s highest-ever net profit margin of 16.7%, driven by advertising and AI chips. Microsoft’s Cloud unit grew 29% but at decelerating momentum, yielding a 38.3% net profit margin.
1. Q1 Revenue Growth and Margins
Amazon’s Q1 earnings showcased AWS revenue growth of 28% year-over-year, marking an acceleration from prior quarters and underscoring the business’s expanding scale. In comparison, Microsoft Cloud revenue rose 29% but showed signs of slowing momentum, with Microsoft delivering a 38.3% net profit margin versus Amazon’s 16.7%.
2. Margin Expansion Drivers
Amazon achieved its highest net profit margin ever at 16.7%, buoyed by strength in high-margin advertising services and AI-focused hardware sales. The shift toward these premium offerings signals further diversification of Amazon’s profit base beyond core e-commerce operations and supports a more resilient long-term growth outlook.