Andy Jassy Just Delivered Incredible News for Amazon Stock Investors

Amazon Web Services posted 37% year-over-year revenue growth in Q2 2026, marking an acceleration driven by AI tools and custom chips. CEO Andy Jassy disclosed that AWS could ultimately reach $1 trillion in annual revenue, a significant increase from prior forecasts of several hundred billion dollars.

The cloud unit is backed by a $496 billion order backlog and Amazon plans to deploy $220 billion in capital expenditures during 2026 to support the expansion. The spending will fund infrastructure necessary to meet surging demand for AI compute and cloud services.

Amazon shares trade at a price-to-earnings ratio of 22, which Jassy and analysts view as undervalued relative to other major technology companies given AWS's growth trajectory and profitability potential.

The revised trillion-dollar revenue target represents a material upgrade to AWS's long-term opportunity and underscores management's confidence in sustained AI-driven cloud adoption. The capex commitment of $220 billion signals Amazon is prioritizing market share in the AI infrastructure race, even as it pressures near-term margins.