Amazon used its third-quarter call to make two arguments at once: that AWS will become the first trillion-dollar revenue business in history, and that getting there requires spending that looks alarming in the meantime.
"We still expect 2026 cash capex of approximately $220 billion — the majority for AWS — and expect to spend meaningfully more in 2027," CEO Andy Jassy said on Thursday. Analysts pressed repeatedly on why the bill keeps growing and where margins land. Jassy's answer was that AWS is a $184 billion annualised revenue business growing 39 percent year over year — its sixth straight quarter of steady growth — and can grow "north of 40 percent" in both 2027 and 2028. "There has never been a business with a trillion dollars of annual revenue," he said, calling the buildout a once-in-a-lifetime opportunity. Investors were less moved: the stock fell about six percent in after-hours trading.
The streaming side of the company has quietly become a real business. Jassy said Prime Video has "a revenue run rate in the tens of billions of dollars and is now profitable in its own right" — a firmer claim than his May statement that the unit was profitable. Amazon MGM Studios has taken more than $1.2 billion at the global box office this year, led by Project Hail Mary at an estimated $684 million worldwide, the studio's biggest release. On television, Amazon cited the fourth season of Reacher at 66 million viewers in 28 days, and said the first six Thursday Night Football games averaged 17.7 million viewers, up 16 percent year over year, while the second season of NBA on Prime drew more than two million.
Why it matters: Amazon and Microsoft are running the same experiment at industrial scale — convert an extremely profitable legacy business into AI infrastructure before anyone else finishes building theirs, and accept that the accounting looks worse every quarter. The difference is that Amazon is doing it on a retailer's margins. The bull case is a trillion-dollar revenue line plus a streaming unit that pays for its own content; the bear case is that $220 billion a year buys capacity that arrives just as the demand curve bends. Neither will be settled this quarter. What the call did settle is that the spending is not slowing.
