Jassy Predicts AWS Could Become $1 Trillion Business
Amazon Web Services (AWS) has been on fire lately, and its success is not going unnoticed. CEO Andy Jassy believes that AWS could become a $1 trillion business someday, which would be a significant milestone for the company.
AWS accounts for the majority of Amazon's operating profit, totaling 60% in Q2. The division has been growing rapidly, with a jaw-dropping 37% growth rate - the best in years. This growth is expected to continue, driven by increasing demand for cloud computing services and AI computing resources.
Jassy noted that Amazon will not have enough computing capacity to meet demand in 2026, and the shortage is also expected to last into 2027. As a result, the company is already seeing demand for 2028 computing pop up. This robust demand justifies Amazon's huge spending bill of $220 billion on capital expenditures.
If AWS reaches its predicted target of $1 trillion in annual revenue, it would equate to significant stock performance gains for Amazon investors. With a 39% operating margin, AWS could generate $393 billion in operating income, which would be a 403% rise from today's levels. If Amazon can maintain today's valuation and deliver this level of growth, it would become one of the market's best-performing stocks.