TD Cowen Sees $165B AWS Revenue by 2026 Amid AI Investment Boom

TD Cowen has raised its forecast for Amazon's AWS revenue to $165 billion by 2026. This increase is driven by strong growth in AI adoption and a significant investment of $200 billion in AI infrastructure.

The firm attributes the rapid growth of AWS to a 24% year-over-year increase, as well as the use of proprietary chips that lower costs and boost margins. Enterprise AI workloads are expected to accelerate, potentially pushing revenue even higher by 2027.

A key risk mentioned is the recent drop in free cash flow due to heavy spending. However, most analysts remain bullish on Amazon's long-term growth prospects in the cloud and AI sectors.