CEO Andy Jassy Just Told Investors That AWS Can Grow Revenue 40% in 2027 and 2028 and Eventually Become a Trillion-Dollar Business. Is It Enough to Get Wall Street on Board?

Amazon CEO Andy Jassy revealed to investors that Amazon Web Services (AWS) could see revenue growth of more than 40% in both 2027 and 2028, potentially transforming the business into a trillion-dollar enterprise within the next five to ten years. Despite the artificial intelligence (AI) market raising its expectations for evaluating large hyperscalers and AI stocks, AWS has reported impressive growth figures, with a 39.3% year-over-year revenue increase and an annualized run rate of $184 billion.

AI benefits AWS by selling compute capacity, custom chips, and access to AI models, tools, and agents. In the third quarter, AWS contributed around 23% of the company's total revenue, but a remarkable 64% of its operating profit. AWS's backlog now stands at $578 billion, driven by demand for core infrastructure and generative AI services.

However, investors remain cautious due to the high capital expenditures required to maintain these growth rates, with Amazon guiding for $220 billion in spending this year alone. Despite this, analysts are optimistic, with consensus estimates projecting at least 40% growth in AWS revenue for 2027 and 2028. CEO Jassy remains bullish on AWS's ability to generate substantial returns, viewing AI as a once-in-a-lifetime opportunity.

The company's significant investments in AI have resulted in negative free cash flow over the past year, further fueling market concerns. While the potential of AI presents exciting possibilities, investors are wary of safety concerns and the possibility of AI cannibalizing Amazon's existing businesses, such as e-commerce and advertising.