Amazon Sees 2027 Capex Well Above $220B as Jassy Targets 40%-Plus AWS Growth Through 2028

Amazon (AMZN) expects 2027 capital spending to rise meaningfully above the roughly $220 billion it plans for 2026, mostly for AWS, as customers consume new AI capacity almost as fast as it is installed. CEO Andy Jassy said he expects AWS revenue growth above 40% in both 2027 and 2028, backed by strong long-term cash flow and investment returns. AWS sales rose 39% to about $46 billion in the third quarter, the fastest growth in nearly five years, and the cloud unit's annualized revenue now stands at about $184 billion.

AWS: demand outruns capacity

Jassy has said capacity is booked solid for 2026, largely sold out for 2027 and partly sold out for 2028, and that Amazon could spend a lot more without it being a poor use of capital. Inference, the use of trained AI models, generates well over half of AWS AI revenue even though enterprise adoption is early, and it drives additional core cloud usage. Bedrock is AWS's fastest-growing multibillion-dollar service. Backlog for previous-generation Graviton instances more than doubled from the prior quarter.

Trainium moves beyond AWS

Strong demand for Trainium, Amazon's AI chip, led Amazon to plan to offer the chips outside AWS in late 2027. For more on Jassy's view of inference costs, see our earlier article.

Advertising and AI shopping

Advertising revenue grew about 11% to $19.6 billion, down from 22% growth a year earlier and short of the roughly $20.8 billion analysts expected. Amazon attributed the slowdown to an earlier Prime Day that shifted spending into the second quarter, which created an estimated 850-basis-point drag on sequential growth, and said growth should reaccelerate to the high teens in the fourth quarter. More than 400 million customers used Amazon's shopping assistant over 12 months, with interactions up 570%, and U.S. users spend about 50% more per order. Jassy said external AI shopping agents have not materially affected Amazon Ads.

The quarter in brief

Net sales rose 12% to about $202 billion, essentially in line, while EPS of $1.89 trailed the $1.96 estimate. Operating income reached $28.1 billion, a 13.9% margin, the highest on record. Amazon guided fourth-quarter net sales growth of 12% to 16%. For the after-hours reaction to spending, see our Amazon earnings article.

Robots and satellites

Amazon operates more than 1 million fulfillment robots, expects to automate more repetitive tasks and is exploring robotic delivery for the final 100 yards. Amazon Leo, its satellite internet service, targets launch by the end of 2026. Because Amazon delayed capitalizing the costs until the first quarter of 2027, most of the fourth-quarter costs will be expensed. Amazon also agreed in April to acquire Globalstar for about $11.5 billion.

Sources: Amazon's third-quarter 2026 results and earnings call remarks by CEO Andy Jassy; analyst estimates are from market data. This is informational, not a recommendation to buy or sell.