NEW YORK, NEW YORK - NOVEMBER 30: Amazon CEO Andy Jassy speaks during the New York Times DealBook Summit in the Appel Room at the Jazz At Lincoln Center on November 30, 2022 in New York City. The New York Times held its first in person DealBook Summit since the start of the coronavirus (COVID-19) pandemic with speakers from the worlds of financial services, technology, consumer goods, private investment, venture capital, banking, media, public relations, policy, government, and academia. (Photo by Michael M. Santiago/Getty Images)Getty ImagesAmazon shares jumped more than 10% Friday after the company delivered second quarter results showing AWS revenue growth and margins accelerating faster than its rising AI capital spending — the kind of expectations‑beating performance investors have been rewarding as hyperscalers race to prove their massive AI investments can translate into profitable cloud demand. Meta fell short of that test earlier in the week, while Microsoft passed it, underscoring why Amazon’s results landed so well.Today, Amazon’s stock has more upside. On revenue acceleration, operating margin, capital intensity and free cash flow, Nvidia’s operations outperformed the pack. Yet, unless Nvidia exceeds investor expectations, its stock may not follow.Amazon’s Results Show AWS Pulling AheadAmazon reported expectations-beating growth and operating income for the second quarter. Revenue increased 20% to $200.61 billion — $4.1 billion above consensus — while operating income rose 43% to $27.5 billion — $2.5 billion above its guided range. Earnings per share of $5.75 came in 216% above expectations, helped by $53.4 billion in pretax nonoperating income, mostly a markup on Amazon’s stake in AnthropicInvestors cared most about AWS revenue growth and operating income. Revenue for the unit rose 37% to $42.2 billion — six percentage points above consensus — while operating income of $16.6 billion yielded 39.4% operating margin, up about 6.5 percentage points. MORE FOR YOUThe future for this and other Amazon businesses look bright. AWS is "booming," according to CEO Andy Jassy, who disclosed a contracted backlog of $496 billion and a $25 billion annual run rate for both the company’s AI and in-house silicon units (Trainium, Graviton).Three negatives failed to dent the stock. First, trailing free cash flow swung from an $18.2 billion inflow in Q2 2025 to a $7.6 billion outflow in Q2 2026. Second, third-quarter revenue guidance of $199.5 billion was $4.6 billion below the $204.1 billion analysts wanted. Finally, Amazon raised its 2026 capex guidance by 10% to $220 billion due to rising memory costs.Why Amazon Shares RoseInvestors sent Amazon stock higher because the company showed it could grow AWS revenue faster than capex. Jassy told investors that once revenue growth outpaces incremental capex growth, the resulting cash flow and returns become compelling, CNBC reported.AWS’s $496 billion backlog attached to a 39.4% margin may have changed investors’ minds — persuading them that rather than an open-ended expense, capex was a shorter-term investment that would yield profitable growth.Where Amazon Stock Could Go NextAmazon stock has 40% upside, according to the TipRanks consensus of 34 analysts. Bullish analysts see the stock — 12 times forward EBITDA, per Jefferies — as trading at a discount to Walmart. The upside comes from AWS growth and margin acceleration, the expanding custom silicon business that will lower computing cost, and the profitable, fast-growing advertising business.A bearish Seeking Alpha model values the company near $156 — making Amazon shares 34% overvalued. The bear cases stresses the uncontrolled rise in capex, negative free cash flow, limited AI cloud computing capacity, and the risk that Anthropic is overvalued.How Nvidia’s Metrics CompareIf the scorecard is revenue acceleration, operating margin, capital intensity and free cash flow, Amazon trails Nvidia on all four. Nvidia’s most recent quarter delivered revenue of $81.6 billion, up 85%, with 75% gross margins. Over the last 12 months, Nvidia’s 64% operating margin, $6.6 billion of capex on $119 billion of free cash flow, and 105% return on invested capital, according to Stock Analysis, were much better than Amazon's 13.7% consolidated operating margin and negative free cash flow. Nvidia also generated $48.6 billion of free cash flow in one quarter and trades near 22 times forward earnings with a consensus price target 56% above the recent price, per Stock Analysis.Moreover, Nvidia leads the AI chip design industry, which is more inherently profitable than the AI cloud services segment.In a nutshell, Nvidia gets paid to build the AI cloud while Amazon must fund the AI build to keep up with demand.