Amazon joins Alphabet in warning of a bigger spending jump in 2027

What happened

Amazon said on a Thursday earnings call that it expects capital spending in 2027 to be higher than the $220 billion projected for 2026. Amazon also expects its AWS cloud unit to grow more than 40% in 2027 and 2028.

Confirmed

Global impact / market context

Higher capital spending means Amazon will put more cash into data centers, chips and equipment, which reduces cash available for other uses now but could raise future revenue if AWS keeps growing. Investors must weigh that spending against promised returns.

Analyst inference

Alphabet also expects a meaningful increase in 2027 spending, so at least two large technology companies plan to raise investment together. That could keep pressure on costs and free cash flow across cloud providers, while suppliers of chips and data-center equipment may see more orders.

Analyst inference

What to watch

1. Amazon projects AWS growth to top 40% in both 2027 and 2028 and sees the $1 trillion annual revenue mark arriving within five to 10 years, which would justify continued heavy spending. Confirmed
2. Watch whether Amazon gives specific 2027 capital spending figures or timelines for the $1 trillion AWS revenue goal, because concrete numbers would let investors judge returns more clearly. Proposed
3. Track chip revenue growth, which Amazon says is triple-digit as Graviton and Trainium commitments come online, since chip demand ties directly to data-center spending and AWS capacity. Analyst inference

Evidence

• gurufocus.com