Amazon posts strong Q1 2026 with 28% AWS growth and booming AI chip business.

Amazon reported a strong Q1 2026, with AWS revenue growing 28% and all segments showing sequential improvement. The company's custom AI silicon business is rapidly expanding, now at a $20 billion annual run rate with triple-digit growth. Trainium chip commitments have exceeded $225 billion, and this silicon business is expected to reach over $80 billion in annual revenue by Q1 2028, fueling further growth for AWS and Amazon overall. Despite some concerns about net income and free cash flow, the valuation remains attractive due to growth in AI chips and advertising, supporting significant long-term stock price gains.