Is Amazon’s Cloud Unit Big Enough to Reaccelerate Share Gains?

Amazon (NASDAQ:AMZN | AMZN Price Prediction) didn’t gain much in 2025, but a 7% year-to-date gain suggests that the tech giant is turning a new leaf. Amazon Web Services are a key part of the growth story, with artificial intelligence reaccelerating growth. Amazon CEO Andy Jassy told investors in the company’s Q3 earnings release that AWS growth rates have returned to 2022 levels, and that has major ramifications for the stock. 

AI Demand Remains Strong 

Jassy didn’t just tell investors that AWS’s growth rate has returned to 2022 levels. He also said that the company is still seeing strong demand for AI and core infrastructure. Artificial intelligence plays a direct role in AWS’s success because AI companies need cloud platforms to manage and store data. 

AWS also makes it possible to develop AI agents, which will become more valuable in the years ahead. These agents continue to become more advanced and can help with various tasks, such as automated customer service and optimized workflows. 

Tech giants have committed to spending more on AI this year than they did last year, and all of that money and data has to go somewhere. Amazon’s cloud platform acts as the foundation for many AI builds, and while Microsoft (NASDAQ:MSFT) and Alphabet (NASDAQ:GOOG) (NASDAQ:GOOGL) also have cloud platforms, Amazon is the largest provider in the industry. 

Amazon’s Other Business Segments Can Also Benefit From AI

The resurgence of high AWS growth rates isn’t the only catalyst that can turn Amazon into a superb pick for 2026. The company is also using AI to enhance its other product lines. For instance, AI helps Amazon provide personalized product recommendations in its marketplace, and it also results in online ads that generate more clicks. 

Amazon has multiple business segments in key industries that posted impressive growth rates in Q3. Online advertising revenue increased by 24% year-over-year, while online store sales were up by 10% year-over-year. Amazon’s Trainium2 AI chips also did well, registering more than 150% in sequential gains.  It’s already a multi-billion dollar segment under the broader Amazon umbrella.

Physical AI Will Boost The Demand For Cloud Platforms

Most of the AI boom has taken place digitally. People use ChatGPT and other AI models to search various prompts, but it can also autogenerate quizzes and perform various tasks that you won’t get from a Google search. 

However, AI demand can go parabolic as physical AI becomes more common. Humanoid robots and autonomous vehicles both require more cloud storage, which can give AWS an additional boost. This technology is starting to become more available, with Waymo expanding its self-driving services to several U.S. cities.

Amazon has plenty of tailwinds that should give the stock a boost in 2026. However, long-term catalysts make the stock look promising beyond this year as well.