Amazon Boosts Capex Forecast to $220B as AI Spending Surges

Amazon has raised its capital expenditure forecast for 2026 to $220 billion, up from $200 billion earlier in the year. The increase is primarily due to higher memory and component costs, as well as continued investment in artificial intelligence (AI) and cloud infrastructure.

The company's AI ambitions are driving this spending, with AWS revenues rising 36.7% year over year in the second quarter to $42.2 billion. This represents its fastest pace in 18 quarters and the fifth consecutive quarter of acceleration.

AWS operating margin expanded to 39%, up roughly 650 basis points from a year earlier, indicating that scale and efficiency gains are outpacing the cost of new capacity. The unit's backlog has more than doubled over the past year to $496 billion, giving management visibility into demand well beyond this year's spending cycle.

Rival cloud providers Microsoft and Alphabet are also investing heavily in their infrastructure, with capex plans of roughly $190 billion and $195-$205 billion, respectively. Amazon's $220 billion plan puts it ahead of its peers, but hyperscaler capital intensity is now an industry-wide phenomenon.