CEO Andy Jassy Just Told Investors That AWS Can Grow Revenue 40% in 2027 and 2028 and Eventually Become a Trillion-Dollar Business. Is It Enough to Get Wall Street on Board?

Yahoo Finance ·

Although investors are extremely worried about an artificial intelligence bubble and when it might pop, it's also become clear that the market has significantly raised its threshold for evaluating large hyperscaler and AI stocks. As of this writing, the Roundhill Magnificent Seven ETF has declined more than 6% over the past month, despite many earnings reports showing signs that AI is benefiting their businesses. For instance, on Amazon 's ( AMZN +6.12% ) third-quarter earnings call, CEO Andy Jassy told analysts that he expects the company's cloud business, Amazon Web Services (AWS) , to grow revenue by more than 40% in both 2027 and 2028, becoming a trillion-dollar business at some point in the next five to 10 years. Is this enough for Wall Street to get on board? Amazon CEO Andy Jassy. Image source: Getty Images. It's hard to look at Amazon's third-quarter earnings and say AI isn't significantly benefiting the business. AWS experienced 39.3% year-over-year revenue growth, the highest level seen in nearly five years. Revenue also achieved an annualized run rate of $184 billion. AWS benefits from AI in several ways, including selling compute capacity, renting out its custom chips, and selling access to AI models, tools, and agents. In the third quarter, AWS accounted for nearly 23% of the company's total revenue but nearly 64% of its total operating profit, so AWS has by far the best margins of the three business lines.

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