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AWS grows 39% as Amazon plans $220B in 2026 capex

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AWS revenue grew 39% to $46 billion in the third quarter, its fastest pace in nearly five years. Andy Jassy expects AWS to keep growing above 40% in both 2027 and 2028, but Amazon will spend about $220 billion on capex this year to get there, and meaningfully more next year.

By: Mikola Máté Patrik · · 3 min read

Amazon logo with the smile arrow on a white background
Image: Amazon · Press kit · Amazon logo from the official Q3 2026 results press release · Source

The numbers

Amazon reported its third-quarter results on October 29 (Amazon):

  • Net sales: $201.9 billion, up 12% year over year.
  • Operating income: $28.1 billion, a 13.9% margin and Amazon's highest operating margin ever.
  • AWS: $46.0 billion in revenue, up 39%, at a $184 billion annualized run rate. AWS operating income rose to $17.8 billion from $11.4 billion.
  • Net income: $20.7 billion, down from a year ago because last year's figure included $9.5 billion in pre-tax gains from Amazon's Anthropic investments.
  • Free cash flow: a $42.4 billion outflow over the trailing twelve months, driven mainly by a $94.8 billion increase in property and equipment purchases, largely for AI.

Jassy: a trillion-dollar AWS, but spending comes first

On the earnings call, Andy Jassy said AWS can grow north of 40% in both 2027 and 2028 and could become a business with a trillion dollars in annual revenue (TechCrunch). Amazon still expects roughly $220 billion in 2026 cash capex, mostly for AWS, and meaningfully more in 2027. Jassy called AI a once-in-a-lifetime opportunity that justifies the spending. Investors were less enthusiastic, and shares fell about 6% in after-hours trading.

AI in the report

  • Bedrock: Fortune 500 spending grew nearly 7x and total token volume nearly 17x year over year.
  • New Bedrock models include GPT-6 Astra, GPT-6.1 Sol, Claude Opus 5.5, Kimi K3, Grok 4.7 and GLM 5.3.
  • Bedrock Managed Agents, a managed agent service powered by OpenAI, is in public preview.
  • Tens of thousands of customers use AgentCore, and they deployed twice as many agents in Q3 as in the prior three quarters combined.
  • Amazon says the Strands harness cuts agent task costs by 32% through better token efficiency, and Strands Box, an open-source agent sandbox, is in preview.
  • AWS acquired DuckLabs, the company behind DuckDB, open-sourced the Kiro Crew agent workspace and made the AWS Continuum vulnerability service generally available.

What it means for you

The numbers show that enterprise AI spending is now real revenue for cloud providers, not just a promise, and 17x Bedrock token growth makes that hard to miss. The capex plan also shows the capacity race is still accelerating. If you build on AWS, expect more agent infrastructure such as AgentCore and Strands in the coming months, along with deeper integration of OpenAI models.

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