Amazon CEO Andy Jassy predicts that Amazon Web Services and the company’s stores business could each reach $1 trillion in annual revenue within the next five to ten years. This would mark the first time any company has achieved such a milestone, as no company has ever had a business with $1 trillion in annual revenue. Jassy made this bold statement during the company’s third-quarter earnings release and analyst call, emphasizing the potential for both divisions to hit this unprecedented target.
AWS Growth Trajectory
Jassy highlighted AWS’s current $184 billion annual revenue run rate, with 39% growth in the third quarter. He expects growth to exceed 40% in both 2027 and 2028, supported by a $578 billion backlog of contracted revenue. Large customers often reserve capacity in gigawatt-sized blocks, providing Amazon with visibility into future revenue through 2029. Jassy acknowledged the uncertainty of long-term predictions, stating, “You can’t predict with any certainty five to 10 years from now, especially at these types of growth rates,” but expressed confidence in AWS’s potential to surpass $1 trillion. In March, he had already raised his expectations, telling employees AWS could reach at least $600 billion in annual revenue within a decade, double his earlier forecast.
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The CEO also pointed to the early adoption of AI by businesses, the falling costs of running AI models, and emerging applications like AI-driven security flaw detection as drivers of AWS’s continued growth. These factors, combined with the substantial backlog and long-term customer commitments, underpin Jassy’s optimistic outlook.
Stores Business Momentum
Amazon’s stores business, which includes online and physical stores, generated $309 billion in sales over the past year. If Jassy’s projection includes third-party seller services and advertising, the figure rises to $575 billion. For context, Walmart, the world’s largest retailer, reported $713 billion in revenue in its most recent fiscal year. Jassy noted that Amazon’s stores business is gaining ground, adding $90 billion in gross sales over the past year, twice as much as its next-largest U.S. competitor each quarter.
Units sold have increased by nearly 15% this year, and Jassy anticipates a continued shift from physical to online retail, as 80% of retail sales still occur in brick-and-mortar stores. He believes this transition will further fuel the stores business’s growth, positioning it to reach the $1 trillion milestone.
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Financial Challenges and Investments
Despite the bold predictions, Amazon’s shares fell 6% in after-hours trading following a profit shortfall. The company plans to invest $220 billion in capital projects this year, primarily for AWS, with “meaningfully more” spending expected in 2027. This has led to a negative $42.4 billion free cash flow over the past year, compared to positive $14.8 billion a year earlier. To fund these investments, Amazon has raised $115 billion in long-term debt this year, causing its interest expense to more than triple to $1.7 billion in the third quarter.
Jassy remains confident in the strategy, stating, “Our strategy is working, and I expect it will for the foreseeable future.” He emphasized that Amazon is earning back its capital spending faster than before, despite the short-term financial pressures. As the company handles these challenges, its focus remains on driving long-term growth and achieving the ambitious revenue targets for both AWS and its stores business.