AWS grew 39%, according to Amazon's third-quarter earnings released on October 29, 2026. For the quarter ended September 30, 2026, AWS revenue reached $46 billion, up 39.3% year over year, its fastest growth in nearly five years, with an annualized revenue run rate of $184 billion. Amazon CEO Andy Jassy said in the earnings release that AWS revenue growth is projected to exceed 40% in both 2027 and 2028. The same release also states the cost of that growth: cash capital expenditures of about $220 billion in 2026, meaningfully more in 2027, and negative free cash flow of $42.4 billion over the past 12 months.
Orders first, spending follows
The figure Jassy gave on the earnings call explains the bet better than revenue alone: the AWS backlog reached $578 billion, more than double a year earlier. Cloud demand is not something Amazon is waiting for; signed contracts are already queuing for compute capacity. The roughly $220 billion of 2026 spending covers data centers, AI chips, robots, satellites and other projects, far above the $128 billion spent in all of 2025. Orders first, capacity second is the hardest logic in this report: without building more, Amazon cannot serve growth it has already sold.
The rest of the report is less comfortable
The group-wide numbers were not as bright as AWS. Amazon's total third-quarter revenue was $201.9 billion, up 12%, and earnings per share came in at $1.89, below the $1.96 analysts expected; net income of $20.7 billion was slightly below the $21.2 billion a year earlier. AWS operating income rose from $11.4 billion to $17.8 billion, while group operating income reached $28.1 billion, a record 13.9% operating margin. Free cash flow turned negative mainly because AI investment pushed capital spending higher. After the release, Amazon shares fell in after-hours trading; the market did not read strong growth and heavier spending as good news only.
For AWS customers and rivals, the number to watch is not 39% but whether $578 billion of orders can turn into usable capacity on time. By putting growth above 40% for both 2027 and 2028, Jassy has turned the order book into a public commitment. If capacity delivery lags, the backlog stops being a growth story and becomes a queue of complaints; if it keeps up, $220 billion is simply the entry fee for the next round of growth.
