Amazon Just Doubled Its AWS Revenue Forecast: Here’s Why the Stock Could Still Be Cheap

Amazon Web Services (AWS), the cloud computing division of Amazon that accounts for the bulk of the company’s operating profit, is now targeting $600 billion in annual revenue by 2036. Amazon Chief Executive Andy Jassy has doubled the unit’s prior 10-year projection of $300 billion, citing an accelerating wave of enterprise demand for artificial intelligence infrastructure.

The forecast, if realised, would represent one of the largest revenue concentrations in the history of the technology industry. Getting there requires AWS to sustain roughly 14% compound annual growth from its current base, according to analysis cited by MEXC. That is a meaningful deceleration from its current trajectory: AWS closed 2025 with $128.7 billion in full-year revenue, growing approximately 19-20% year-over-year. In the fourth quarter of 2025 alone, AWS pulled in $35.58 billion, surpassing analyst consensus estimates.

To fuel that growth, Amazon announced a $200 billion capital expenditure plan for 2026, predominantly directed at AWS infrastructure buildout to meet AI-driven demand, per Investing.com. That figure exceeded Wall Street expectations and briefly sent Amazon shares lower after the earnings announcement, as investors weighed the scale of the spending commitment. Amazon’s market capitalisation stood at approximately $2.26 trillion at the time of reporting.

AWS Partnership Strategy and the Race for AI Workloads

The infrastructure bet is inseparable from AWS’s partnership posture. The division has deepened ties with Anthropic, the AI safety company, and OpenAI, the maker of ChatGPT, positioning AWS as the preferred cloud substrate for two of the most computationally intensive AI platforms in operation. Amazon also signed a deal with OpenAI to supply AI services to U.S. government employees, a contract that adds a sovereign cloud dimension to the company’s AI revenue pipeline. These partnerships matter because the AI workloads they carry, including large language model training and inference at scale, consume enormous quantities of compute, storage, and networking capacity, which is precisely the infrastructure AWS is being built to provide.

Wall Street has responded to the trajectory with notable optimism. Citigroup raised its Amazon price target from $265 to $285 and projected 28% AWS growth in the first quarter of 2026, according to TradingView. JPMorgan Chase set its own target at $280, per GuruFocus. Amazon’s stock has risen more than 100% over the preceding three years, a run driven in large part by AWS’s early positioning as an AI infrastructure beneficiary, according to IndexBox.

Still, the question American investors face is not whether AWS is growing. It plainly is. The more contested question is whether AWS can maintain its lead as Google Cloud and Oracle mount credible, well-capitalised challenges for the same pool of AI workloads.

Google Cloud and Oracle Press Their Own AI Cases

Alphabet’s Google Cloud, the cloud services arm of Alphabet Inc., has been narrowing the gap with AWS on AI-native capabilities, particularly through its Tensor Processing Units (TPUs), custom silicon designed specifically to accelerate machine learning workloads. Google Cloud has also moved aggressively on multimodal AI integration, embedding its Gemini model family directly into cloud services for enterprise customers. While Google Cloud’s revenue remains smaller than AWS’s in absolute terms, its growth rate has been competitive, and Alphabet’s broader AI investment cycle gives it a deep well of proprietary research to commercialise through the cloud layer.

Oracle Corporation, the enterprise software and database giant, has carved out a distinct position by marketing its Oracle Cloud Infrastructure (OCI) as a lower-latency, dedicated-hardware alternative to the hyperscaler model. Oracle has landed major AI infrastructure contracts, including a reported commitment from OpenAI to use OCI capacity, which places Oracle in direct competition with AWS for some of the same AI-first customers. Oracle’s pitch to enterprises centers on sovereign cloud deployments and workload migration from legacy Oracle database environments, a path that AWS and Google Cloud can pursue only at the application layer. Oracle’s cloud business has been one of the fastest-growing segments among large-cap enterprise technology companies, though its total scale remains significantly smaller than AWS.

The structural difference between the three competitors is worth noting. AWS benefits from the longest track record in enterprise cloud, the broadest global infrastructure footprint, and the deepest catalogue of managed services. Google Cloud brings differentiated AI research and proprietary silicon. Oracle brings deep enterprise database lock-in and a willingness to build dedicated infrastructure for individual clients. Each approach reflects a different theory about where the most durable AI infrastructure revenue will ultimately concentrate.

Risks That Could Slow AWS Growth

The $600 billion projection is not without offsetting risks. AWS has faced reliability concerns, including outages in the Middle East region, and renewed antitrust scrutiny of Amazon’s broader business practices could create regulatory friction for the cloud unit. The $200 billion capital expenditure commitment for 2026 also introduces execution risk: large infrastructure builds of that scale require sustained demand to justify the return on invested capital, and enterprise cloud procurement cycles can slow during periods of macroeconomic tightening.

A user posting in a widely followed Reddit thread, summarised the tension directly: “AWS at 14% CAGR to $600B assumes no macro shock, no competitive displacement, and no regulatory intervention for a decade. That’s a lot of assumptions to price in.”

The tech sector broadly continues to be pulled forward by AI breakthroughs, cloud computing adoption, semiconductor supply constraints, and cybersecurity investment cycles. Each of those forces creates tailwinds for AWS, but none of them operates exclusively in Amazon’s favour. Google Cloud and Oracle are equally positioned to benefit from enterprise AI adoption, and both are spending aggressively to ensure they do.

For investors weighing Amazon’s stock against that backdrop, the core question is whether AWS’s current growth rate, its partnership depth with Anthropic and OpenAI, and its $200 billion infrastructure commitment represent a durable competitive moat, or whether the AI infrastructure market is large enough to produce multiple winners at scale.

[This article was produced with AI-assisted research.]