AWS could hit $1 trillion in revenue, Jassy says

Amazon CEO Andy Jassy said AWS could become a $1 trillion annual-revenue business within five to 10 years. He made the projection during the company’s October 29 earnings call, as Amazon forecast $220 billion in 2026 cash capital spending. Amazon expects to spend meaningfully more in 2027, with most of this year’s spending directed toward AWS. The forecast hinges on sustained cloud growth and does not guarantee the company will reach that scale.

AWS generated $46 billion in third-quarter revenue, up 39% from a year earlier, Amazon reported. That quarter’s revenue implies an annualized run rate of about $184 billion, but it is not the same as actual revenue earned over a full year. The company said this was AWS’s fastest growth in nearly five years.

Jassy told analysts he expects AWS revenue to grow more than 40% in both 2027 and 2028. He said the company believes AWS could reach $1 trillion in annual revenue within five to 10 years. The projection depends on continued growth beyond those two years, and remains a management forecast rather than a reported result.

Amazon’s earnings release also said AWS operating income rose to $17.8 billion in the third quarter, from $11.4 billion a year earlier. The broader company reported third-quarter net sales of $201.9 billion. Those results show AWS is a major growth and profit engine, but they do not verify Jassy’s long-term target.

Amazon expects cash capital expenditure of about $220 billion in 2026. Jassy said most of that spending would go to AWS, which needs infrastructure to serve growing cloud and AI demand. He also said Amazon expects to spend “meaningfully more” in 2027, without giving a dollar amount.

The $220 billion figure covers Amazon’s overall cash capital spending, not AWS alone. Capital expenditure, or capex, generally means money spent on long-lived assets such as data centres, servers and networking equipment. Reuters reported that Amazon’s third-quarter spending on property and equipment reached $77.26 billion.

Jassy cited a $578 billion AWS backlog, according to GeekWire. It represents contracted revenue not yet recognized as sales and gives Amazon visibility into customer commitments. It does not guarantee timing or profitability.

Amazon argues that companies are still early in adopting AI and will need cloud infrastructure to develop and run their systems. AWS sells computing capacity, storage and AI services to businesses, governments and developers. More demand could support growth, but Amazon must build capacity ahead of some customer use.

Jassy said Amazon’s investment is producing growth. “Our AWS investment in functionality and infrastructure is working, with over 39% year-over-year revenue growth in Q3 ($184 billion revenue run rate) and projected revenue growth rates of over 40% both in 2027 and in 2028.” — Andy Jassy, Amazon president and CEO. The statement reflects the company’s view and forecast, not an independent assessment of future performance.

The company’s reported cash flows show the cost of that expansion. Amazon generated $168.3 billion in operating cash flow over the 12 months through September. However, free cash flow over that period fell to a $42.4 billion outflow, mainly because of higher purchases of property and equipment, Amazon said.

Investors have focused on whether AI demand will justify the scale and timing of Amazon’s infrastructure investment. Reuters reported that Amazon shares fell in after-hours trading following its earnings results, amid concerns about spending and cash flow. Jassy argued that the company sees strong demand and expects financial returns from its investment.

That debate matters because large data centres require costly equipment and significant power. If customer demand grows as quickly as Amazon expects, added capacity could support AWS sales. If demand or returns fall short, the company could face pressure to justify the spending, though Amazon has not provided a specific AWS-only capex total.

Ultimately, Jassy’s $1 trillion AWS target is a long-range forecast, not an established milestone. The unit’s $46 billion quarterly revenue and 39% growth provide a strong current base, while Amazon plans continued heavy investment. The company’s 2027 and 2028 growth will offer nearer-term evidence. Investors will watch whether customer demand translates into revenue and returns.