Prediction about AWS margins off the mark; operations the driver, end user impact easily offset by cloud model

  • January 24, 2023
  • Analyst: Philbert Shih

Commentary in The Motley Fool predicts that AWS will start to see declining margins as customers pick apart their cloud bills amid a tougher macroeconomic environment. The author also pointed to a tightening competitive landscape and the maturation of startups (a key AWS demographic) to support his argument. The take is misdirected and the author mistakenly believes that AWS operating margins are driven exclusively by end user behaviour. It is operational dynamics that have the biggest say in how much operating margin an AWS is able to generate.