Excess Returns · Thursday, September 3, 2026
Dan Niles highlighted that the three major public cloud vendors—Amazon Web Services, Microsoft Azure, and Google Cloud—experienced accelerating revenue growth in the second quarter. More significantly, their operating margins expanded by approximately two percentage points, indicating improved profitability alongside increased revenue.
“And if you look at the big three public cloud vendors, and so that'd be obviously Amazon's web services, Microsoft's Azure, and Google Cloud platforms, all three of them saw accelerating revenue growth from the March to the June quarter where revenues went from increasing 35% in March, year over year for their cloud businesses, to up 43%.”
“But more importantly, the operating margins also expanded about two percentage points.”
“So not only were revenues accelerating, but the profitability of those revenues was also going up.”