Amazon.com Inc., headquartered in Seattle, is undertaking a major expansion of its capital spending in 2024, with plans to allocate approximately $200 billion towards infrastructure and technology development. This represents an increase of $70 billion compared to its capital expenditures in the preceding year.
According to JPMorgan analyst Doug Anmuth, this surge in capital expenditure primarily targets the enhancement of Amazon's cloud computing platform, Amazon Web Services (AWS), as well as advancements in artificial intelligence capabilities. While these sizable investments are forecasted to temporarily decrease free cash flow, potentially resulting in a burn of $36 billion, they are deemed necessary to sustain future growth in the cloud sector.
Anmuth projects that capital expenditures will continue on an upward trajectory, estimating $198 billion for 2025 — a 54% increase year over year — and $240 billion for 2026, reflecting a 21% rise from 2025 figures.
The AWS platform is currently experiencing accelerated growth, evidenced by order backlogs hitting $244 billion in the fourth quarter of 2023. This constitutes a 38% increase compared to the same period the previous year. Demand driving this growth includes both core cloud computing workloads and those augmented by AI technologies.
A noteworthy example of AWS's expanding commitments is Amazon's contract with OpenAI, valued at $38 billion over seven years, which emphasizes the scale and continuation of cloud service adoption. Anmuth forecasts that AWS could achieve a growth rate of up to 27% in 2026, supported by ongoing sector expansion and Amazon's scalability.
Amazon's revenue growth extends beyond its cloud services division, encompassing other revenue sources. International expansion efforts are particularly notable in markets such as Germany, the United Kingdom, and Japan, where accelerated sales growth has been recorded and contributes meaningfully to Amazon's global revenue stream.
Moreover, revenue generation includes offerings in multimedia streaming, specifically video and music services, further diversifying Amazon’s income profile.
Anmuth anticipates that Amazon will persist with its assertive investment approach, striving for technological progress and infrastructural development. Even though this strategy may exert pressure on the company's short-term financial metrics, it is expected to yield substantial market share gains in the medium to long term.
Financial projections include an estimated revenue figure of $178.30 billion for the first quarter of 2026 and an adjusted earnings per share (EPS) estimate of $3.21.
On the stock market front, Amazon’s share price registered a 0.80% increase, reaching $210.42 during the latest trading session on Tuesday.