Jassy Says AWS Can Grow Past 40% In 2027 And 2028, Then Reach $1 Trillion In Revenue
Amazon's CEO paired a bolder cloud forecast with a $220 billion spending plan for 2026 and "meaningfully more" next year.
Amazon CEO Andy Jassy said on the company's earnings call Thursday that AWS can grow north of 40% in each of 2027 and 2028 and become a trillion-dollar revenue business in the next five to 10 years. He put AWS's current annualized revenue run rate at $184 billion.
A trillion-dollar claim, and the visibility behind it
A Morgan Stanley analyst called the trillion-dollar remark rare and more than Jassy usually offers, then asked how he gets there. Jassy pointed to the big blocks of capacity customers take, the hundreds of megawatts or sometimes up to a gigawatt, which are reserved well in advance. He said that gives Amazon "very good visibility into 27 and 28 and some of 29 too."
He hedged on the long horizon: "You can't predict with any certainty five to 10 years from now," he said, but "it's not a stretch for us to imagine that this could be over a trillion dollar business."
The forecast follows a quarter in which AWS revenue was $46 billion, up 39.3% from a year earlier and its sixth straight quarter of faster growth, Jassy said. AWS backlog stood at $578 billion, growing at triple-digit rates and well diversified, he said. Jassy tied the case to a cloud market he described as mostly still on-premises: about 85% of global IT spending, in his words.
A once-in-a-lifetime capital bill
Jassy reaffirmed cash capital spending of about $220 billion for 2026, the majority for AWS, and said Amazon expects to spend "meaningfully more" in 2027. Cash capex was $75.9 billion in the third quarter, CFO Brian Olsavsky said.
Asked by a JPMorgan analyst how much capital the growth requires, Jassy said it is "meaningful" and called AI "a once in a lifetime opportunity." He said Amazon will invest "to continue being the leader," adding that the company can fund the plan.
Margins, chips and the fourth-quarter outlook
AWS operating income was $17.8 billion, a 38.7% operating margin, according to Olsavsky. He said Amazon does not guide AWS margins and expects them to fluctuate with the level of investment.
Amazon, which sells goods through its stores and runs AWS cloud computing, reported total revenue of $201.9 billion, up 12%, and operating income of $28.1 billion. For the fourth quarter, Olsavsky guided net sales of $240 billion to $247 billion and operating income of $28.5 billion to $33.5 billion.
Jassy also said Amazon intends to sell its Trainium AI chips outside AWS late in 2027.
Amazon's fourth-quarter guidance puts net sales between $240 billion and $247 billion, with 2027 spending to be set above this year's $220 billion.
Sources
- Amazon misses Wall Street targets, offers cautious Q4 outlook as shares slide | AP News — Associated Press
- Amazon (AMZN) Q3 earnings report 2026 — CNBC
- Breaking Down Amazon's Third-Quarter Earnings — Bloomberg
- AWS Q3 earnings report 2026 — CNBC
- Amazon Q3 Earnings: Ad Revenue Growth Slows — variety.com
