Amazon Web Services reached trailing-12-month revenue of $161.4 billion, putting the cloud computing business ahead of 476 members of the S&P 500 by revenue as a stand-alone business.
Amazon operates the largest public cloud computing platform in the world. AWS launched in 2006 and completely changed how businesses manage their IT infrastructure.
Developers could easily obtain enterprise-grade computing power through Amazon simply by clicking a button. The platform provided as much processing and storage capacity as needed.
That capability became more important than ever in the age of artificial intelligence. In this new era, demand can grow extremely quickly.
Andy Jassy Forecasts Massive AWS Growth
Amazon CEO Andy Jassy thinks the cloud business could grow much larger. He said AWS could be a trillion-dollar business within five to 10 years.
Amazon has seen AWS revenue growth accelerate in each of the last five quarters. Growth reached 39% year-over-year in the third quarter.
That acceleration is expected to continue. Jassy called for revenue growth exceeding 40% in 2027 and 2028.
The growth reflects a delay in Amazon’s capital expenditures related to its AI build-out. There is a long lead time for Amazon’s investments in new data centers to turn into revenue.
It takes roughly two years after financing new construction for Amazon to sell new AWS services.
Amazon’s capital expenditures actually declined in 2023. Capex then climbed roughly 57% in 2024 and another 58% in 2025.
Management’s outlook calls for 67% growth in capex this year. Investors can expect steady revenue growth for AWS going forward.
Reaching One Trillion Dollars
Jassy’s comments suggest revenue could accelerate further as the company sees higher returns on its invested capital.
“We continue to accelerate our capex payback and have even more conviction than we already had that the investment we’re making in AWS will yield a much larger revenue and free cash flow-generating business than we would have imagined a couple of years ago,” Jassy told analysts on the company’s third-quarter earnings call.
AWS is on track to generate about $176 billion in revenue this year. To reach $1 trillion in revenue within five to 10 years, the business must maintain very strong growth.
Achieving that target across a five-year timeframe would require an annualized expansion rate of approximately 41.5%. To reach it within 10 years, that CAGR drops to just 19%.
Amazon should be able to keep increasing its return on invested capital over time. A larger share of capital expenditures goes toward revenue-generating servers instead of data center structures.
That means the rate of capital expenditure growth can slow without the same slowdown in revenue growth.
Long Term Platform Strategy
Amazon is benefiting from the ongoing supply shortage for compute amid the boom in AI development. The company holds a backlog of $578 billion in remaining performance obligations.
AWS also stands to benefit as businesses move from on-premises compute to the cloud.
“This is a different model than primarily hosting GPUs or renting short-term data center capacity,” Jassy told analysts.
“This is a long-term platform strategy that broadly helps customers invent and evolve their customer experiences, operate stably, and build a reliable partnership they can grow for many years. It also yields very attractive long-term economics for us, regardless of supply scarcity,” Jassy said.
That dynamic should result in sustained revenue growth even as supply constraints ease. This provides greater confidence that AWS can reach Jassy’s long-term outlook for $1 trillion in revenue.
