- As per the Reuters report, Jassy said that AI provided an “unusual opportunity to build this very large business,” adding that the company clearly had significant demand signals.
- In its Q4 earnings results, Amazon earmarked $200 billion in capital expenditures in 2026, with a bulk of the expenditure earmarked towards meeting demand for cloud and AI infrastructure.
- At the meeting, Jassy also reportedly said that Amazon was expecting to make its one millionth delivery using drones this year.
Amazon.com (AMZN) reportedly expects revenue from its cloud business Amazon Web Services (AWS) to hit $600 billion in annual sales by 2036, double the prior estimate.
According to a report from Reuters, citing comments made by CEO Andy Jassy during an internal all-hands meeting, artificial intelligence could boost cloud revenues.
“I've been thinking for the last number of years that AWS, call it 10 years from now, could be about a $300 billion annual revenue, run rate business,” Jassy reportedly said. “I think what's happening in AI is that AWS has a chance to be at least double that.”
Shares of AMZN closed up 1.63% on Tuesday, and were trading about 0.12% down in extended market hours at the time of writing.
AWS Review
As per the Reuters report, Jassy said that AI provided an “unusual opportunity to build this very large business,” adding that the company clearly had significant demand signals.
"We're not just spending the $200 billion of capex because we're hoping AI is going to be big," Jassy reportedly said.
In its fourth-quarter (Q4) earnings results, Amazon earmarked $200 billion in capital expenditures in 2026, higher than the $130 billion spent in 2025. Jassy had noted then that a bulk of the expenditure would be geared towards meeting demand for cloud and AI infrastructure.
"The faster we grow in AWS, the more capex we have to spend shorter term, because we have to lay out all that capital for land, power, buildings, chips, servers, networking gear. We have to lay all that out a couple of years in advance of when we're going to monetize," Jassy reportedly said at the all-hands meeting.
Other Updates
At the meeting, Jassy also reportedly said that Amazon was expecting to make its one millionth delivery using drones this year.
Providing an update on the recent closure of Fresh and Go physical stores, Jassy reportedly said that they accounted for less than 1% of the company’s overall grocery sales.
Meanwhile, according to a report from the Wall Street Journal, Amazon is looking to cut back its shipping via the U.S. Postal Service, aiming to reduce the volume by at least two-thirds by fall of 2026. The Post handles last-mile deliveries for the e-commerce company.
Retail Position
On Stocktwits, retail sentiment around AMZN shares was in the ‘extremely bearish’ territory at the time of writing, amid ‘low’ message volumes.
One bearish user pointed out that the $600 billion target in 10 years amounted to an average growth rate of 17%, while the segment had grown 19% in the last quarter.
Shares of AMZN have climbed nearly 10% in the past year.
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