Amazon spends $77.3 billion on capital projects in third quarter

Amazon’s third-quarter capital spending more than doubled from a year earlier and exceeded analysts' expectations, while cloud revenue grew faster than online-store sales.

On 29 October, CEO Andy Jassy reiterated a forecast of approximately $220 billion in cash capital expenditure for 2026—spending on long-lived assets such as property and equipment—with most intended for Amazon Web Services (AWS), its cloud infrastructure business. TechCrunch said Jassy expects meaningfully higher spending in 2027 and sees a path to financial returns.

Spending outpaces expectations

Amazon’s total quarterly revenue rose 12% from a year earlier but fell short of analysts' estimate. Net income also declined.

SiliconANGLE attributed the profit decline primarily to a $9.5 billion pretax gain on Amazon’s investment in Anthropic, a superintelligence (SI) startup, recorded in the year-earlier quarter.

SiliconANGLE described the free-cash-flow figure as quarterly, following another deficit in the preceding quarter. Free cash flow measures cash remaining after operating needs and capital spending, although calculation methods vary.

Cloud growth runs ahead of online stores

AWS’s revenue continued a six-quarter trend of steady growth. Jassy put its annualized revenue run rate at $184 billion: the current sales pace extended over a year, rather than revenue already earned over a full year.

Jassy partly attributed weaker online-store and advertising performance to moving the annual Prime Day sale from the third quarter to the second in several countries to avoid a clash with July’s FIFA World Cup.

Jassy projects further cloud growth

Jassy projects AWS revenue growth above 40% in both 2027 and 2028 and believes annual revenue could reach $1 trillion within 5 to 10 years. He cited enterprise demand, new functionality and capacity additions as reasons for that projection.

Jassy pointed to growing adoption of Amazon Bedrock, Amazon’s superintelligence model marketplace, and increased revenue from its Graviton and Trainium chips. He said the chip business was growing by triple-digit percentages year over year and that Amazon plans to make Trainium chips available to external customers toward the end of 2027.

TechCrunch said analysts repeatedly questioned Jassy about the scale of spending, evidence of future growth and expected profit margins. The outlet put Amazon shares down about 6% in after-hours trading; SiliconANGLE recorded a decline of more than 7%.

For the fourth quarter, which includes the holiday shopping season, Amazon forecasts revenue of $240 billion–$247 billion. The midpoint falls below analysts' $244.5 billion forecast.