For the first time, Amazon (AMZN) has pulled back the curtain on exactly how much money its artificial intelligence efforts are making. In his letter to shareholders, CEO Andy Jassy revealed that the AI revenue run rate for Amazon Web Services (AWS) exceeded $15 billion in the first quarter of 2026. This “run rate” is a financial guess that predicts how much money a company will make over a full year based on its recent performance over a shorter time, like a few months. AMZN stock rose 1.9% in pre-market trading following the news.
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Forget margin or options. Here's how the pros trade AMZNJassy noted that these figures are “ascending rapidly.” To put this growth into perspective, he pointed out that just three years into the original launch of AWS, the cloud unit had a $58 million run rate. Today, three years into the AI wave, this same metric is nearly 260 times larger. He added that the business would be growing even faster if not for the “capacity constraints” currently hitting the entire tech industry.
Amazon’s Custom Chips Create a $20 Billion Powerhouse
Amazon is also building the hardware that runs AI software. The annual revenue run rate for the company’s chips business, which produces the Graviton, Trainium, and Nitro processors, has now surpassed $20 billion.
This figure has doubled from the $10 billion milestone reported earlier this year. Demand for these custom chips is so intense that Jassy mentioned, “There’s so much demand for our chips that it’s quite possible we’ll sell racks of them to third parties in the future.” Having proprietary hardware allows AWS to reduce costs for customers while creating a massive competitive moat against other cloud providers.
Amazon Plans to Spend $200 Billion on CAPEX in 2026
Earlier this year, Amazon’s plan to spend $200 billion on capital expenditures (CAPEX) in 2026 caught some investors off guard. Jassy used today’s letter to address those concerns, explaining that the majority of this spending is focused on the AI infrastructure that will drive profits for years to come.
Jassy confirmed that much of the current spending will be “monetized over 2027 and 2028.” He also reassured shareholders by stating, “We already have customer commitments for a substantial portion of it.”
Essentially, Amazon is setting itself up as the main hub for the world’s AI needs, especially with AWS aiming for $142 billion in sales this year.
Is Amazon a Good Stock to Buy Right Now?
Amazon stock has a consensus Strong Buy rating among 46 Wall Street analysts. This rating is based on 43 Buy and three Hold recommendations issued in the last three months. The average 12-month AMZN price target of $284.34 implies 28.5% upside from current levels.
