AWS Could Hit $1 Trillion in Revenue as Soon as 2035

Morgan Stanley analyst Brian Nowak believes Amazon's cloud division, AWS, could reach $1 trillion in annual revenue within eight to ten years. To put this into perspective, AWS currently generates around $170 billion in annualized sales.

This growth is driven by the increasing demand for computing power, particularly from artificial intelligence-related workloads. Nowak estimates that Amazon will add 6 gigawatts of capacity in 2026 and another 8 gigawatts in 2027, with a potential to continue adding around 8 gigawatts annually after that.

According to Nowak's model, if AWS can increase its revenue per watt from $8 to $12, the company could reach $1 trillion in annual revenue as early as 2035. However, this projection remains highly dependent on continued growth in demand for AI computing and the ability of Amazon to bring on compute capacity.

Amazon's CEO Andy Jassy has stated that AWS could 'very possibly' become a business generating $1 trillion in annual revenue, highlighting the scale of the opportunity management sees in cloud computing and artificial intelligence. While this target is ambitious, Morgan Stanley has already raised its Amazon price target to $335 from $330 following the company's second-quarter earnings.