JPMorgan analyst Doug Anmuth projects Amazon’s capital spending will reach $395 billion in 2027 and $476 billion in 2028, far above the roughly $220 billion the company expects this year. The forecast follows CEO Andy Jassy’s pledge to spend “meaningfully more” next year. Amazon’s trailing 12-month free cash flow has already swung to a $42.4 billion outflow, driven by a $94.8 billion increase in property and equipment purchases tied largely to AI. AWS revenue rose 39.3% to $46 billion in the third quarter, with a backlog of $578 billion, as Jassy targets more than 40% growth in 2027 and 2028 and a trillion-dollar cloud business within five to 10 years. Analysts are split on the risk.

Amazon’s capital spending is poised to climb far beyond the roughly $220 billion the company has penciled in for 2026, with JPMorgan projecting the bill will approach half a trillion dollars annually within two years.

In a research note, JPMorgan technology analyst Doug Anmuth estimated capital expenditures of $395 billion in 2027, a 77% jump from the prior year, followed by $476 billion in 2028, up another 20%. “We do not expect capex growth to decelerate or slow next year,” Anmuth wrote. He added that management’s clear view of demand gives it the confidence to commit to growth above 40% over the next two years and to push even harder into AI compute infrastructure.

The forecast follows comments from Amazon CEO Andy Jassy, who said last week that the company would spend “meaningfully more” in 2027 without attaching a figure. Anmuth’s note supplies one.

The scale of the outlay is already visible in Amazon’s cash flow. Free cash flow swung to an outflow of $42.4 billion over the trailing 12 months, compared with an inflow of $14.8 billion in the same period a year earlier. The reversal was driven mainly by a $94.8 billion year-over-year increase in purchases of property and equipment, which Amazon attributed largely to AI investments.

Note: Capital spending figures for 2027 and 2028 are JPMorgan estimates; the 2026 figure is Amazon’s own projection.

The third quarter itself carried a $75.9 billion capital bill. Results fell just short of estimates on both revenue and earnings per share, and the stock dropped more than 6% in after-hours trading before recovering. Shares were down more than 1% on Friday but rebounded the following Monday, lifting the year-to-date gain to 9%, trailing the S&P 500’s 11% advance.

AWS carries the growth story

The cloud unit remains the strongest part of the business. Amazon Web Services revenue rose 39.3% from a year earlier to $46 billion, the sixth consecutive quarter of accelerating growth, and now runs at an annualized pace of about $184 billion. Operating income for the segment reached $17.8 billion, edging past Wall Street’s forecast of roughly $45.6 billion in revenue. The backlog stood at $578 billion, growing at a triple-digit rate, and Jassy described it as well diversified.

Jassy has argued that about 85% of global IT spending still sits on premises and that much of it should migrate to the cloud over the next decade. He said Amazon is installing an AI accelerator roughly every 14 seconds, with customers absorbing capacity nearly as fast as it comes online. “Almost as fast as we install capacity, customers are gobbling it up,” he said on the earnings call.

CFO Brian Olsavsky said the AI investments have the potential to generate long-term revenue and free cash flow. Jassy said Amazon keeps shortening the payback period on its infrastructure, though returns differ between the core cloud business and the AI build-out, and that a large block of capacity is due over roughly the next eight quarters. He sees AWS growing more than 40% in both 2027 and 2028 on the way to becoming a trillion-dollar revenue business within five to 10 years, and said Amazon could end up with two such businesses, with online stores as the other candidate.