AWS lambda function to retrieve any uploaded files from s3 and upload the unzipped folder back to s3 again
Lambda would not be a good fit for the actual processing of the files for the reasons mentioned by other posters. However, since it integrates with S3 events it could be used as a trigger for something else. It could send a message to SQS where another process that runs on EC2 (ECS, ElasticBeanstalk, ECS) could handle the messages in the queue and then process the files from S3.
I have an s3 bucket which is used for users to upload zipped directories, often 1GB in size. The zipped directory holdes images in subfolders and more. 
I need to create a lambda function, that will get triggered upon new uploads, unzip the file, and upload the unzipped content back to an s3 bucket, so I can access the individual files via http - but I'm pretty clueless as to how I can write such a function?
My concerns are:

Pyphon or Java is probably better performance over nodejs?
Avoid running out of memory, when unzipping files of a GB or more (can I stream the content back to s3?)