On an Andreessen Horowitz podcast on Oct. 23, 2026, Amazon CEO Andy Jassy said AWS capacity for 2027 is largely sold out and a good chunk of 2028 is sold as well, though Amazon has not disclosed the contracted capacity or backlog figures behind the phrase. AWS revenue rose 37% to $42.2 billion in Q2 2026, and Amazon has disclosed more than $225 billion in future Trainium revenue commitments. However, Amazon plans to spend about $220 billion on capex in 2026, trailing 12-month free cash flow was a $7.6 billion outflow, and much of the booked capacity goes to AI labs whose long commitments could be renegotiated if their funding tightens. Amazon closed at $248.00 on Oct. 23, with a market cap of about $2.68 trillion, and its Q3 report is due Oct. 29, 2026.
Summary written by Upside AI from the original article. Read the source for full details.
Read the original on Yahoo Finance ↗
Keywords
cloud computingdata centersartificial intelligenceAMZNcapital expenditure
Open a keyword to see other news on the same topic.
Related tickers and likely impact
AMZN
▲ Likely positiveAmazon
Relevance: medium
| Market | US stocks |
|---|---|
| Sector | Consumer Discretionary |
| Industry | Broadline Retail |
| Market cap | $2.7T |
| Close on 10/23/2026 | 248.04 |
| Change that session | -0.93% |
Impact is scored by AI from the headline and may be wrong. It is not investment advice.
Related news
- Is Amazon Stock Poised to Gain as AI Boosts Cash Flow Prospects?
Amazon is turning its AI investments into revenue-generating products: AWS previewed new agent tools, and Bedrock added Claude Haiku 5.5 at roughly 75% lower cost than its predecessor. In Q2 2026, AWS's AI business and Amazon's Trainium and Graviton chip business each crossed a $25 billion annual revenue run rate, growing at triple-digit percentages, backed by multi-year commitments from Anthropic and OpenAI. AWS sales rose 37% to $42.2 billion in Q2, and its segment operating margin widened to 39.4% from 32.9%. However, Amazon raised its 2026 cash capex outlook to about $220 billion from $200 billion on higher memory costs, pushing trailing-12-month free cash flow to a $7.6 billion outflow, and expects capacity to fall short of demand through 2027. Microsoft and Alphabet face similar trade-offs, with Microsoft's free cash flow down 23% and Alphabet posting a negative $5.9 billion quarterly free cash flow.
- Amazon Spent More on Data Centers Last Quarter Than AWS Earned in Revenue. Should Investors Worry?
AWS, Amazon's cloud unit, generated about $42 billion in revenue in the second quarter, up 36% year over year, with an annual run rate of $169 billion. In the same quarter, Amazon's cash capital expenditures totaled just over $53 billion, mostly tied to AWS and generative AI and about $10 billion above AWS's quarterly revenue. Amazon raised its 2026 capex forecast by $20 billion to about $220 billion. Management says demand is already present: AWS's backlog of contracted future revenue reached $496 billion and is growing at a triple-digit rate, and Andy Jassy says Amazon still cannot meet 2026 demand even at this spending level. The author sees this as a bet on timing, with free cash flow likely under pressure until the new data centers and servers start generating returns, so the key thing to watch is whether AWS revenue keeps accelerating alongside capex.
- What Is Amazon Stock's Biggest Opportunity?
Amazon reported a $496 billion backlog of signed contracts on its fiscal Q2 2026 call, a figure management said had at least doubled from a year earlier. Most of its AI capacity is contracted for at least five-year terms, and Anthropic and OpenAI have made multi-year commitments to its Trainium chips, yet management said Amazon will not have enough capacity to meet demand in 2026 or 2027. AWS generated $129 billion in fiscal 2025, or 18.0% of Amazon's $717 billion in sales, growing 19.7%, and now runs at a $169 billion annual pace. Management expects about $220 billion in 2026 capex, up from about $200 billion, due to higher memory costs, while free cash flow over the last twelve months was negative $11.6 billion. Amazon stock returned 22.4% over the year through October 19, 2026, versus 17.4% for the S&P 500, but closed 7.6% below its highest close of the past year.
- 3 Cloud Leaders That Will Make a Fortune From AI
The author favors Amazon (AMZN), Alphabet (GOOG, GOOGL) and neocloud provider Nebius (NBIS) as beneficiaries of surging AI computing demand. Amazon and Alphabet each plan to spend at least $200 billion on data center capital expenditures this year, with AWS growth accelerating to 37% and Google Cloud to 82%; their backlogs reached $496 billion and $514 billion, respectively, at the end of the second quarter. Nebius, which is much smaller and not yet profitable, reported 454% year-over-year revenue growth in Q2, and analysts expect 519% and 540% growth in Q3 and Q4, plus another 268% increase in 2027. The author sees large upside for Nebius but says its success depends on reaching profitability before the demand wave ends.
- Between Amazon and Alphabet One's Gotten Much More Bang for Their 200 Billion Bucks
Alphabet and Amazon are each investing roughly $200 billion in AI data centers, but the article finds Alphabet is converting that spending into growth faster. Google Cloud revenue jumped 82% to $24.77 billion in the second quarter, up from 63% growth in Q1, while AWS grew 36.7% to $42.2 billion with a $496 billion backlog, versus over $460 billion for Google Cloud in Q1. Alphabet funded its buildout by raising about $70 billion in equity and debt and suspending buybacks, and posted quarterly free cash flow of -$5.86 billion, while Amazon's trailing free cash flow was -$7.6 billion. The author leans toward Alphabet, citing faster cloud growth on a smaller quarterly capex bill and shares that rose 49.49% over the past year versus 19.95% for Amazon. Key watch items include whether Google Cloud keeps outpacing AWS and whether Amazon starts selling Trainium chips to outside customers.
- IREN’s Childress Timeline, the Hidden Forces Behind AI Builds, Data Center CAPEX is Rising
Related markets
Latest news
- Bloom Energy Raised Its 2026 Forecast for the Third Time. Is the Stock a Buy More Than a Third Below Its Record?
Bloom Energy reported record third-quarter revenue of $1.24 billion, up 138% year over year, and raised its 2026 revenue forecast to $4.4 billion–$4.6 billion for the third time this year. Despite the results, shares fell about 9% to $217.77 on Oct. 22 and dropped to roughly $203 after hours, still about 37% below the June 22 record close of $345.85. The weak spot was cash: operations used $27 million in the third quarter, contract assets (revenue booked but not yet billed) rose to $793 million, and free cash flow was negative $181 million. The author says the stock now looks cheaper relative to the raised earnings forecast and could be considered for gradual investment, but wants to see contract assets convert to cash before increasing the position more aggressively.
- Apple Joins Nvidia in the $5 Trillion Club. Here's Which Stock I Think Can Get to $10 Trillion First.
Apple has joined the $5 trillion market-cap club after recent stock gains, while Nvidia remains slightly larger at $5.13 trillion. The author expects Apple to reach $10 trillion first, arguing it is a lifestyle brand with strong customer loyalty: iPhone owners account for about half of Apple's sales, 87% of current iPhone owners say their next smartphone will also be an iPhone, and Apple-made devices in use reached a record 2.5 billion. Nvidia trades at about 14 times next year's expected profit of $15.91 per share, which may reflect a headwind in its AI business, since data centers account for roughly 90% of its revenue and competitors such as AMD and Qualcomm are rising. The article notes that either company could reach the milestone first and that both can perform well.
- Inflation Is Running Hotter Than Expected. That Could Be Bullish for Bitcoin.
Consumer prices rose 3.7% in the 12 months through September 2026, and Bitcoin fell about $1,000 after the hotter-than-expected October 14 report, as higher inflation raises the odds of Federal Reserve rate hikes. The article argues Bitcoin is not necessarily well suited to hedge rising costs: producer prices jumped 6.3% over 12 months, and squeezed consumers may invest less in riskier assets like Bitcoin. However, J.P. Morgan Asset Management views Bitcoin as a bet that governments will keep creating money, and U.S. M2 money supply grew 5.7% in the year through August 2026. If the Fed cuts rates while prices keep climbing, Bitcoin's fixed supply could serve as an inflation refuge, and the author says the next few quarters will test this thesis.
- AI bear slams Nvidia's GPU pitch: 'There's not scarcity other than that which is created by Jensen Huang'
Ed Zitron, CEO of PR firm EZPR and a critic of the AI spending boom, says Nvidia (NVDA) is creating the scarcity it sells against. He pointed to a concentrated customer base, with five companies accounting for about 70% of Nvidia's accounts receivable in the first half, and accused Jensen Huang of channel stuffing by pushing GPUs into the channel. He questioned what more data centers deliver, citing a Bloomberg report that Microsoft (MSFT) has about 2 gigawatts of AI compute online out of 12 gigawatts reported. He said OpenAI and Anthropic have become 'load-bearing' for several large companies and, asked what should happen if they falter, replied 'Let them die.' He argued that a rescue would not hold up the market, since it depends on GPU sales continuing to rise at higher prices.
- Vertiv (VRT) Stock Looks Below Fair Value After A Huge Run
The article says Vertiv (VRT) shares have risen strongly on the data center and AI infrastructure wave, with a five-year return of about 660%. A discounted cash flow (DCF) model estimates latest twelve-month free cash flow at about $3.0 billion and an intrinsic value meaningfully above the $194.32 share price. New AI factory partnerships with NVIDIA and Dassault Systèmes, plus a sizeable order backlog tied to AI data center projects, are cited as factors that could affect how fast cash arrives and how much investment is needed. The piece also notes a P/E of 43.2x and asks whether the current price is fully supported by the cash flows implied in the DCF estimate.
- Ex-dividend calendar for Oct 26–30: One bank's 50% rights issue ratio stands out
This week, 10 companies will pay cash dividends, ranging from nearly 3.5% to 20%. MSR set Nov 2 as the last registration date for its 20% advance dividend of the 2/2026 round, with an ex-date of Oct 30 and an estimated payout of about 2,210 billion VND on Nov 6. MSR's shareholders approved an advance of 50% for this round, about 5,500 billion VND, which together with the 10% advance from round 1/2026 brings its total 2026 dividend to 60%, roughly 6,600 billion VND. Techcombank (TCB) set Oct 30, 2026 as its last registration date, with an expected ex-rights date of Oct 29, to issue 3,543,120,207 shares at a 50% ratio, so holders of 100 shares receive 50 new ones. The issue, worth over 35,431 billion VND at par value, is funded by undistributed retained earnings from the audited 2025 financial statements.
Get the briefing on Telegram or Zalo
Join the Upside Telegram channel or Zalo group for the Vietnam stocks and gold briefing at 8:00 and 19:00 (Vietnam time) on trading days, plus a weekly wrap on Saturday morning.