Key Points
- Jassy said AWS cloud capacity is largely sold out through 2027, with much of 2028 booked.
- Amazon has flagged roughly $220 billion in 2026 capital spending, mostly on AI and cloud infrastructure.
- Pre-sold capacity gives AWS revenue visibility but exposes how far buildout lags demand.
The latest:
Amazon Web Services capacity is largely sold out through 2027 and a sizable portion of 2028 is already booked, chief executive Andy Jassy said, as AI labs and corporate customers race to lock in computing power. Jassy said Amazon is struggling to build new capacity fast enough to keep pace with customers. The company reports third-quarter results on Thursday, October 29.
Details:
- The commitment: Jassy said AWS has booked most of its large capacity commitments for 2027, with a sizable share of 2028 also spoken for, and that 2026 cloud capacity is already sold out. Amazon continues to reserve some capacity for on-demand customers using services including EC2 and its AI platform Bedrock.
- Where he said it: The comments came on a podcast with Andreessen Horowitz executives Ben Horowitz and Erik Torenberg on Friday, rather than in a company filing or investor call. Jassy did not set out a timetable for when the constrained capacity would ease.
- The spending: Amazon has previously announced plans for about $220 billion in capital expenditures in 2026, much of it tied to expanding AI and cloud infrastructure. Jassy indicated the figure is not a ceiling, saying the company “could invest a lot more and it wouldn’t be a bad use of capital,” citing the sold-out 2026 capacity.
- Who is buying: Demand is coming from AI labs and businesses racing to secure computing power, according to Jassy. Amazon did not name individual customers behind the multi-year commitments or break out how much of the booked capacity is tied to AI training workloads.
- Why it matters to AWS: Customers lining up years in advance give the cloud unit greater visibility into future demand, and those commitments could support revenue growth as new data centers come online. Jassy framed the bottleneck as construction speed, not order flow.
- The open question: Amazon has not shown how quickly it can convert long-term commitments into booked revenue, nor how much additional capital that conversion will require. Neither a revised capex figure nor a data-center delivery schedule has been disclosed alongside Jassy’s remarks.
- The earnings test: Third-quarter results are due Thursday, October 29. The AWS growth rate and any revision to the 2026 spending plan are the two lines investors will read first, after Jassy signalled the budget could rise.
- The street view: Amazon carries a Strong Buy consensus based on 44 analyst ratings issued over the past three months, according to TipRanks data. The average price target of $330.49 implies 33.26% upside from the current price. Shares were down 0.95% at the time of writing.
Background:
AWS is Amazon’s cloud computing arm and its main profit engine. Demand for AI model training and inference has turned data-center capacity into a scarce resource across the industry, pushing hyperscalers into multi-year capital commitments well ahead of delivery.
Between the lines:
Sold-out capacity cuts two ways. It removes demand risk from the $220 billion spending plan, which is the case Jassy is making. But it also means AWS is leaving revenue on the table today because the data centers do not exist yet, and customers denied capacity can book it with rival clouds instead. That tension is what the October 29 growth rate will test.
What’s next
Third-quarter results on Thursday, October 29: the AWS growth rate, any revision to the $220 billion 2026 capital expenditure plan, and whether management puts a timeline on new data-center capacity coming online.
