Amazon Web Services positioned as top cloud stock pick due to AWS generating majority of operating profit while growth accelerates

AWS accounted for 59% of Amazon's operating profits in the last quarter, with AWS growing at a 28% rate compared to North American and International commerce sales growth of 12% and 19% respectively in the first quarter.

Google Cloud revenue rose 63% year over year in Q1, partly driven by Alphabet's custom Tensor Processing Unit (TPU) chip—a processor designed for better training and inference cost per token versus traditional GPU-based AI computing—which Alphabet is beginning to sell to external clients.

Microsoft's Azure grew at 40% in its latest quarter, but the company does not break out Azure profitability information to investors the way Amazon and Alphabet do.

Cloud computing providers benefit from AI workloads because clients pay for consumption on an ongoing basis; with millions of AI processes running simultaneously and new models requiring continuous training and inference, this creates a recurring revenue stream.