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AWS will be a $1T business, Jassy says. But first, it will spend big.

SoftwareOctober 30, 20261 min read

Amazon CEO Andy Jassy says its cloud unit, AWS, could one day earn a trillion dollars a year. First, Amazon plans to spend very large sums to build the computing systems needed for AI.

What happened

On Amazon's quarterly earnings call, CEO Andy Jassy repeated his goal of making AWS a trillion-dollar revenue business. He said Amazon expects about $220 billion in cash capital spending in 2026, most of it for AWS, and more in 2027. Shares fell about 6% in after-hours trading after the call.

Key numbers

AWS revenue grew 39% from the same quarter a year earlier.
AWS has grown steadily for six quarters in a row.
AWS is a $184 billion annualized revenue run-rate business.
Jassy expects AWS to grow more than 40% in 2027 and 2028.
Amazon expects about $220 billion in cash capital spending in 2026.

Some background

Capital spending means money spent on long-term things like buildings, servers, and chips. AI services run on cloud computing centers, so cloud companies must build huge amounts of this equipment. AWS is Amazon's cloud business, which rents computing power to other companies.

Why it matters

Investors are worried that Amazon is spending too much on AI before the profits arrive. Jassy says the demand is real and that the spending is worth it. Other cloud companies, such as Microsoft, are also spending a lot while growing fast, so the AI race is testing how long big spending can continue.

What to watch

Whether AWS keeps growing at about 40% a year.
How much more Amazon spends on AI buildouts in 2027.
Whether profit margins improve as the new systems come online.
How investors react to the high spending over the coming months.

Glossary

AWS: Amazon Web Services, Amazon's cloud business that rents computing power and online services to other companies.
run-rate: A estimate of yearly revenue based on the most recent period's results multiplied out over a full year.
cloud computing: Using computing power and storage over the internet instead of owning your own servers.

Same story, different eyes

The InvestorAI

At 40% a year, $184B reaches $1T in about five years

Through an investor's eyes, the key is speed.

Read the full take in the app →

The SkepticAI

A 40% growth forecast, and what would make it believable

The $1T goal rests on AWS growing north of 40% in both 2027 and 2028, and that's a nice number to check against real signals as they come in.

Read the full take in the app →

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