The fiscal quarters for the world’s three largest cloud service providers all closed on June 30, with earnings releases following in succession during the final week of July. Despite sharing an identical reporting period, the three companies displayed markedly different growth performances.
Alphabet (GOOG) (GOOGL) disclosed that Google Cloud revenue surged 82% year-over-year to reach $24.8 billion. Microsoft (MSFT) reported that its Azure and other cloud services grew at 43% during the quarter (the fiscal fourth quarter of fiscal year 2026). Amazon (AMZN) posted 37% growth for Amazon Web Services (AWS), with revenue hitting $42.2 billion.
The 82% increase is not an anomaly for a single quarter. In the first quarter of 2026, Google Cloud had already delivered 63% year-over-year growth; and the second-quarter revenue of $24.8 billion stands well above the $13.6 billion recorded in the same period last year. The business is accelerating its growth even as its base continues to expand. The surge in profitability has been even more striking: the segment’s operating profit more than tripled year-over-year, climbing from $2.8 billion to $8.8 billion, with the operating margin correspondingly rising from roughly 21% to about 36%. This margin expansion suggests that growth is not being driven by discount-driven price cuts.
Demand signals now extend years into the future. Google Cloud’s backlog—contracts signed but not yet recognized as revenue—reached $514 billion in the second quarter, after having nearly doubled sequentially to over $460 billion in the first quarter. At the segment’s current revenue run rate, this represents roughly five years’ worth of contracted work.
Of course, high percentage growth rates are somewhat magnified by a smaller base, and Google Cloud remains the smallest of the three in absolute terms. Its $24.8 billion in quarterly revenue still trails AWS’s $42.2 billion. However, when measured by the absolute amount of year-over-year incremental revenue, the two are nearly on par: Google Cloud added approximately $11.1 billion in revenue this quarter compared with the year-ago period, while AWS added about $11.4 billion.
Azure falls between the two in scale. Microsoft does not disclose the segment’s quarterly revenue figure, but CEO Satya Nadella stated that Azure surpassed $100 billion in full-year revenue for the fiscal year ending in June. Google Cloud’s second-quarter revenue, annualized, is roughly $99 billion—approximately the scale that Azure has just crossed. A year ago, Google Cloud’s annualized run rate was only about half of its current level.
Microsoft leads the three vendors in total contract value. Its commercial remaining performance obligations reached $678 billion, up 84% year-over-year, though this figure encompasses Microsoft’s entire commercial business and does not pertain exclusively to Azure.
In sum, upon deeper analysis, the ranking disparities in growth rates appear less surprising. Google Cloud is benefiting from the same artificial intelligence demand tailwinds as its larger competitors, only with a smaller base, and it is converting its record backlog into revenue as rapidly as possible while simultaneously expanding capacity. An 82% growth rate is unlikely to be seen again this time next year, but supported by contracted demand already on the books, Google Cloud is well positioned to maintain a growth rate above its two primary rivals for some time to come.
