Amazon Q1 2026: Five Things to Watch

AWS delivered a 37.7% operating margin in Q1 2026, up from 32.7% a year earlier. The source of the expansion — Trainium and Graviton custom silicon displacing expensive Nvidia GPUs — is real and structural. The risk is that as Trainium commitments convert to live workloads, the support and operational costs accompanying enterprise-grade AI training will compress margins back toward the mid-thirties. Jassy's promise of continued margin expansion deserves healthy scepticism. The trajectory of AWS operating margin is the single most important number in Amazon's income statement.