# Amazon Raises 2026 Capex to $220B as AWS Growth Hits Capacity > Source: > Published: 2026-07-31 09:00:00+00:00 # Amazon Raises 2026 Capex to $220B as AWS Growth Hits Capacity Amazon reported July 30 that AWS second-quarter sales rose 37% to $42.2 billion, its fastest growth in 18 quarters. CEO Andy Jassy told investors that Amazon now expects about $220 billion in 2026 cash capital spending but still will not have enough capacity to meet all demand this year, with the constraint expected to continue in 2027. Amazon reported on July 30 that Amazon Web Services generated $42.2 billion in second-quarter 2026 sales, up 37% from a year earlier and its fastest growth in 18 quarters. AWS operating income increased to $16.6 billion from $10.2 billion in the same quarter of 2025. The results show that cloud and AI demand is converting into revenue, but management says installed capacity is still not keeping pace. ### Demand is outrunning installed capacity CEO Andy Jassy told investors on the earnings call that Amazon now expects roughly $220 billion in cash capital expenditures for 2026. Associated Press reported that the total is up from the $200 billion plan announced in February and includes spending beyond AWS, such as robotics, semiconductors and satellites, while technology and AI account for most of the increase. Jassy cited higher memory costs as the main reason for lifting the forecast. Even at that spending level, Jassy said Amazon will not have enough capacity to meet all of its 2026 demand. He said he expects the same dynamic in 2027 and described demand already visible for 2028 as striking. Those statements are management guidance, not a guarantee about when every planned data-center or chip deployment will become available. ### Growth is arriving with cash pressure Amazon's earnings release said its AWS AI business and its chips business each passed a $25 billion annualized revenue run rate and were growing at triple-digit percentages year over year. Companywide net sales reached $200.6 billion, up 20%. The buildout is also consuming cash. Trailing-12-month free cash flow moved to a $7.6 billion outflow from an $18.2 billion inflow a year earlier. Amazon attributed the change primarily to a $66.1 billion year-over-year increase in property and equipment purchases, net of sales and incentives, largely reflecting AI investment. ### What the constraint means for AI teams For practitioners, the important distinction is between strong demand and immediately available supply. A larger capital plan can expand future access to compute, networking and managed AI services, but Jassy's comments point to continued near-term limits. Teams planning large AWS workloads should treat region, instance family, reservation timing and fallback capacity as operational design inputs rather than assuming the announced spending removes bottlenecks at once. ## Key Points - 1AWS Q2 sales rose 37% to $42.2 billion, its fastest growth in 18 quarters, while operating income reached $16.6 billion. - 2Amazon raised expected 2026 cash capital spending to about $220 billion, yet management still expects capacity to fall short of demand in 2026 and 2027. - 3AWS AI and chips each exceeded a $25 billion annualized revenue run rate, while heavy infrastructure investment pushed trailing free cash flow to a $7.6 billion outflow. ## Scoring Rationale Amazon's fastest AWS growth in 18 quarters, paired with a $220 billion capital plan that management still says cannot meet demand, is a material signal for cloud capacity, infrastructure economics and AI workload planning. ## Sources Primary source and supporting public references used for this report. Practice with real Retail & eCommerce data 90 SQL & Python problems · 15 industry datasets 250 free problems · No credit card [See all Retail & eCommerce problems](/problems/datasets/retail)