Ongoing supply chain issues are playing into Amazon Web Services' (AWS) hand, according to CEO Andy Jassy.

During the company's latest earnings call, Jassy noted that component prices, and particularly those for memory hardware, have "skyrocketed," but that this has actually given "further impetus pushing companies who have on-premises infrastructure into the cloud" as "suppliers are prioritizing their largest customers, which cloud providers are."

Elaborating on the supply chain issues, Jassy said that the company remains capacity-constrained but that it's working closely with its strategic partners and "saw this trend happening early, in the middle to latter part of last year, and we have worked with our strategic suppliers to get a significant amount of supply. We are working very closely with them. I think the team has been very scrappy. I think we have done a good job in making sure that we are not capacity constrained there, but we will watch that very closely."

With this in mind, the company is boasting the "fastest growth rate in 15 quarters," with Jassy revealing that the company has seen its cloud business grow by $2 billion from the previous quarter, its largest fourth quarter-to-first quarter revenue increase "ever."

Revenue for the latest quarter was $37.6 billion, up 28% year-over-year (YoY). The prior quarter saw a revenue of $35.6 billion, itself a growth of 24% YoY.

The cloud business now has an annualized revenue run rate of $150 billion, and a backlog of $364 billion at the end of Q1, not including the recently signed $100 billion deal with Anthropic.

Jassy was keen to draw attention to the company's custom chip business through which it offers the Trainium, Inferentia, and Graviton chips. He reiterated that the chip business today would have an annualized revenue run rate of $50 billion if it were a separate company, and said that "as best as we can tell, our custom silicon business is now one of the top three data center chip businesses in the world."

"For our custom AI silicon, we have recently shared very large multiyear, multigigawatt training commitments from the two leading AI labs in the world, Anthropic (not included in this quarter's results) and OpenAI, as well as an increasing number of companies like Uber betting on Trainium, and we now have over $225 billion in revenue commitments for Trainium," Jassy noted.

Also not included in Q1's revenue is a major deal secured with Meta just last week to deploy "tens-of-millions" of AWS' Graviton5 cores.

On whether the company will look to sell the chips rather than just leasing them via its cloud platform (a move being made by competitor Google), Jassy said: "Always, we have to balance – we have such demand right now for Trainium and we have such demand from various companies who will consume as much as we make – that we have to decide how much we are going to allocate to the existing demand and customers, how much we are going to save to sell as racks, and for our existing customers that we sell Trainium to, how many will be Trainium plus running on our cloud infrastructure versus just the chips themselves. But I expect, over time, there is a good chance we are going to sell racks in the next couple of years."

Regardless of the ongoing success of AWS' chips offering, Jassy reaffirmed that it will "continue to have a deep partnership with Nvidia."

We have immense respect for them, continue to order substantial quantities, will be partners for as long as I can foresee, and we will always have customers who want to run Nvidia on AWS," Jassy said. "And we will also have a very large chips business ourselves. Customers always want choice. It has always been true and always will be true."

Despite this, having its own chip offering is particularly helpful at a time when supply chain constraints have led to memory prices surging. Jassy estimated that by deploying Trainium at scale, the company will save tens-of-billions of dollars in capex each year and "provide several hundred basis points of operating margin advantage versus relying on other chips for inference."

Capex for Q1 was $43.2 billion, and the company has retained its previous estimation of around $200 billion in full-year 2026 capex.

The company also took time during the call to point to its Amazon Leo subsidiary. With 250 satellites now launched, Amazon hopes the business will eventually become a "very large, many-billion-dollar revenue business."

As part of this, the company recently announced plans to acquire Globalstar in a deal valued at $11.57 billion, including Globalstar satellites, radio frequency spectrum, and operational expertise. This will help Amazon add direct-to-device (d2d) services to future generations of its low-Earth orbit (LEO) satellite network.

Jassy said that the company is seeing customers keen to "take data off of the satellite constellation, they are going to want to store it in the cloud, they are going to want to do analytics on it, and they are going to want to do AI on it. Just the combination of LEO with the leading cloud in the world, in AWS, is very compelling to enterprises and to government."

On the future of Amazon Leo, he added: "Today, if you ask what stops us from growing the business, we have to get the constellation into space. We have over 20 launches planned this year. We have over 30 launches planned in 2027. I think the business has a chance to be a very large, many-billion-dollar revenue business, and it has some characteristics that are reminiscent of AWS in that it is capital-intensive upfront, where you are committing a lot of capital and cash in the early years for assets that you get to leverage over a long period of time."

Other key metrics for the quarter include operating income, which was $14.2 billion, up from the previous year's $11.5 billion and Q4 2025's $12.5 billion.

Following the earnings call, AWS' stock value has remained fairly stable, currently down around 1.31%.