By David Koch, CFP®, AIF®, CFA, Director of Portfolio Management/Senior Wealth Advisor
Amazon Web Services (AWS) is the world’s leading cloud computing platform, powering everything from streaming services to financial systems. Instead of buying servers and data centers, businesses rent computing power, storage, and advanced tools from AWS on a pay-as-you-go basis. With over 200 services ranging from AI and analytics to networking and security, AWS has become the backbone of modern digital infrastructure.
AWS is Amazon’s profit engine.
Amazon Web Services reported $116.4 billion in revenue and generated $42.8 billion in operating income over the last 12 months, with both metrics increasing by roughly 50% year over year. AWS makes up nearly 50% of Amazon’s operating income. The margins on AWS are significantly higher than what Amazon earns from offering free 2-day shipping on items like dryer sheets, gel-ink pens, and Halloween candy.
What Happened with the Outage?
On October 20–21, 2025, AWS experienced one of its most significant outages in recent years, disrupting thousands of businesses and critical services worldwide.
The incident began late on October 19 with a DNS resolution failure affecting DynamoDB API endpoints in the US-EAST-1 region, AWS’s largest data center cluster. This failure cascaded into multiple subsystems, impacting Amazon Elastic Compute Cloud (EC2) instance launches, Lambda functions, and network load balancer health checks. Simple, right?
The outage caused ripple effects across industries, disrupting apps and websites like Netflix, Disney+, and even Amazon’s own Ring and Alexa devices. Platforms like Snapchat, Venmo, Coinbase, Zoom, Slack, and Canva went offline, while financial institutions, airlines, and even government services faced interruptions as well.
Ticketing services like Ticketmaster and Eventbrite experienced disruptions, making it difficult for fans to access the Mariners vs Blue Jays MLB American League East Game 7 Championship game, as well as the Lions-Buccaneers game for Monday Night Football.
Downdetector, a site that tracks service disruptions, reported receiving more than 11 million user reports across 2,500 companies.
AWS initiated recovery at 2:24 am PDT by mitigating DNS issues, restored network health checks by 9:38 am, and declared full recovery by 3:01 pm on Oct 21. Despite this, some services continued to process backlogs for hours afterward. Despite the nearly 48-hour outage, investors remained unperturbed by the US stock markets.
This event underscores the systemic risk associated with cloud dependency. While AWS remains the dominant cloud provider (with roughly 30% market share globally), businesses are urged to adopt multi-region and multi-cloud strategies to enhance resilience.
Key Benefits of AWS
Using AWS instead of hosting your own servers enables companies to achieve much greater scalability and cost efficiency. They can instantly scale resources up or down to meet demand and avoid heavy upfront IT investments with flexible, usage-based pricing. AWS data centers in multiple regions help maintain low latency and compliance, and provide robust encryption, identity management, and certifications, which may be difficult if not impossible for small and medium-sized companies to manage on their own.
AWS and AI
AWS isn’t just a cloud provider; it’s positioning itself as a potential AI infrastructure leader. With tools like Amazon Bedrock and partnerships that power generative AI workloads (such as Anthropic), AWS is contributing to the next wave of AI-driven innovation.
This dominance influences tech valuations: companies leveraging AWS for AI can potentially scale faster thereby, attracting premium multiples. AWS itself remains a critical growth and profit center, essential for Amazon’s overall market capitalization and expected growth.
Why AWS Matters for Businesses and Investors
AWS accelerates digital transformation, reduces IT overhead, and provides access to cutting-edge technologies without massive capital outlays. For investors, AWS is a significant part of Amazon’s profit powerhouse, contributing to its margins and growth. Amazon’s leadership in cloud and AI positions it as a significant player in the enterprise tech sector.
Whether it is finding grass-fed beef at Whole Foods, getting digital tickets to go to a concert, or getting on a plane, paying your friend back with Venmo, or buying a cheap hoodie on Amazon.com itself, we’re all entangled in Amazon’s web.
Sources:
Major AWS outage takes down web services like Snapchat and Ring
AWS Q2 2025 revenue hits $30.9 bn as AI and cloud services drive growth – InfotechLead
Mariners-Blue Jays Game 7 ticket access snarled by massive Amazon Web Services outage
AWS outage threatens ticket access for Lions-Buccaneers Monday night game – mlive.com
Disclosure:
Halbert Hargrove Global Advisors, LLC (“HH”) is an SEC registered investment adviser with its principal place of business in Long Beach, California. HH may only transact business in those states in which it is registered, notice filed, or qualifies for an exemption or exclusion from registration or notice filing requirements. Registration does not imply a certain level of skill or training. For information pertaining to the registration status of HH, please contact HH or refer to the Investment Adviser Public Disclosure web site (www.adviserinfo.sec.gov). Additional information about HH, including our registration status, fees, and services can be found at www.halberthargrove.com.
This blog is provided for general information purposes only. No portion of the content serves as the receipt of, or as a substitute for, personalized investment advice from HH or any other investment professional of your choosing. It should not be construed as a solicitation to offer personal securities transactions or provide personalized investment advice. Different types of investments involve varying degrees of risk, and it should not be assumed that future performance of any specific investment or investment strategy, or any non-investment related or planning services, discussion or content, will be profitable, be suitable for your portfolio or individual situation, or prove successful. Neither HH’s investment adviser registration status, nor any amount of prior experience or success, should be construed that a certain level of results or satisfaction will be achieved if HH is engaged, or continues to be engaged, to provide investment advisory services. HH is neither a law firm nor accounting firm, nor does it serve as an attorney, accountant, or insurance agent. No portion of its services, or this content, should be construed as legal or accounting advice. HH does not prepare legal documents or tax returns, nor does it sell insurance products. No portion of the content should be construed by a client or prospective client as a guarantee that he/she will experience a certain level of results if HH is engaged, or continues to be engaged, to provide investment advisory services. All opinions or views reflect the judgment of the author as of the publication date and are subject to change without notice. All information presented herein is considered to be accurate at the time of writing, but no warranty of accuracy is given and no liability in respect of any error or omission is accepted. The views contained herein are not to be taken as advice or a recommendation to buy or sell any investment. Any reference to a specific product, investment, company, etc. is for informational purposes only and should not be construed as a recommendation or endorsement.
