Amazon Lifts 2026 Capex to $220 Billion as AWS Delivers $16.6 Billion Profit

3 articles · Updated · Trefis · Aug 21

$220 billion is Amazon’s new 2026 cash capital-expenditure target, up from about $200 billion, with management citing higher memory costs as it expands AI infrastructure.
AWS drove that spending shift: the cloud unit generated $16.6 billion in Q2 operating income on $42.2 billion of revenue, nearly double North America’s $9.1 billion profit and about 60% of Amazon’s total operating income.
36.7% AWS revenue growth marked a fifth straight quarter of acceleration, backed by a $496 billion backlog and a custom-silicon business running at more than $25 billion annually.
Amazon said servers typically break even in a little under three years against a five- to six-year useful life, but free cash flow will face pressure until new data centers come online.
The heavier cloud focus also leaves retail margins under scrutiny after North America posted a 7.9% margin, while shipping-cost comparisons excluded higher fuel and line-haul rates tied to Middle East disruption.