Amazon’s secret weapon is getting stronger

Quick, what’s the first thing you think of when you hear it Amazon (NASDAQ: AMZN )? The vast majority of respondents would probably mention an e-commerce platform. Although the platform is the most consumer-centric part of Amazon’s business, it’s far from the most exciting.

Instead, Amazon’s cloud computing and chip businesses are the best reason to invest in the stock.

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While there are some questions surrounding whether Amazon will be able to compete with its more AI-focused peers, Amazon’s growth is starting to accelerate, and it could be one of the best stocks to own in 2026.

For me, Amazon Web Services (AWS) is the top reason to invest in Amazon stock. AWS is Amazon’s cloud computing platform, and the world’s largest cloud computing player. At the start of the AI ​​build-out, AWS didn’t even fare as well as its rivals like Google Cloud and Azure. However, it has started to gain momentum.

AWS revenue grew 24% year-over-year in the fourth quarter — the best increase in 13 quarters. So, AWS isn’t just great, it’s getting stronger. One of AWS’s secret weapons is the chips it designs in-house. While Amazon didn’t elaborate on the exact growth rate, the cloud computing business using its chips grew in the triple-digit range during Q4.

Clearly, customers like what they’re getting from Amazon’s in-house chips, and it could serve as a cheaper alternative to running workloads on more expensive hardware. Nvidia (NASDAQ: NVDA ). If this trend continues into 2026, don’t be surprised to see Amazon’s stock rally.

While Amazon may be known for its commercial services, AWS actually provides much of its profit.

In Q4, AWS accounted for 17% of total revenue. However, when you focus on operating profit, its share changes. In Q4, AWS generated $12.5 billion in operating income. Companywide, Amazon generated $25 billion. So, despite making up 17% of sales, AWS generated half of its operating profit. Keep in mind, Amazon’s holiday quarter is typically its commerce division’s most profitable quarter, so this metric is typically skewed more toward AWS throughout the year. In Q3, AWS made up 66% of operating profit.