Saad Ullah
Amazon Web Services (AWS) is gearing up for a significant expansion phase, with growth expected to pick up steam as infrastructure bottlenecks ease and Anthropic's massive data centers go live.
For months, investors have been worried that AWS was losing ground to Microsoft and Google. But the real story turns out to be quite different. AWS's slower growth wasn't about losing customers - it was about supply-side constraints, particularly around power and compute capacity. With fresh infrastructure about to come online, AWS could be heading into a much stronger growth period than most people expect.
Growth Trends and What's Ahead
As trader Shay Boloor recently pointed out, AWS's slowdown was driven by supply-side constraints rather than weakening demand.
Looking at the year-over-year growth numbers tells an interesting story:
- 2023–2024: Growth climbed from 12% in September 2023 to 19% by mid-2024, but then hit a ceiling
- Early 2025: Growth dipped slightly to 17% - not because demand was falling off, but because AWS simply didn't have enough capacity to meet it
- Late 2025: When Anthropic's first gigawatt-scale cluster becomes operational in September, growth should stabilize around 18.5% before jumping to 21.2% by December
- 2026 Surge: Projections show growth hitting 23.8% in March and peaking at 25.3% by June when the second massive cluster launches
Why the Rebound Makes Sense
There are three big reasons AWS is positioned for stronger growth. AI workloads are exploding, and Anthropic is driving massive demand for AWS compute power. The new gigawatt-scale infrastructure removes the supply constraints that have been holding things back. And AWS still dominates enterprise and developer workloads, with partnerships that keep customers locked in.
What This Means for Investors
AWS's growth comeback has real implications for Amazon. Cloud is the company's most profitable division, so accelerating revenue here flows straight to the bottom line. Rapid scaling also helps AWS defend its turf against Azure and Google Cloud. Perhaps most importantly, a visible growth rebound could shift market sentiment on Amazon's stock, reinforcing its position as a cloud and AI infrastructure leader.
Saad Ullah
