Amazon to report earnings after Jassy says AWS sold out

Amazon Amazon.com, Inc. ↘ 1.74% reports third-quarter results after the market closes Thursday, October 29. The main question for investors is how much more the company will spend on AI infrastructure, since its cloud unit says it can't build capacity fast enough to meet demand. Amazon has guided to about $220 billion in 2026 capital expenditures, and CEO Andy Jassy said last week that Amazon Web Services capacity is largely sold out through 2027, Reuters reported.finance.yahoo.com

Jassy's sold-out comments

Jassy made the remarks on October 23 on an Andreessen Horowitz video podcast with Ben Horowitz and Erik Torenberg. "2027 is largely sold out. We always leave a certain amount for on demand and our inference service bedrock, or EC2, but largely sold out all the big chunks. A good chunk of 2028 is sold out," he said, according to Reuters. He also said Amazon "could invest a lot more and it wouldn't be a bad use of capital." Even at current spending levels, Amazon is "leaving a meaningful amount of demand on the table," GeekWire reported. Amazon hasn't disclosed the contracted capacity behind the "sold out" description, 24/7 Wall St. noted via Yahoo Finance.finance.yahoo.com+2

In July, Amazon raised its 2026 capex plan to about $220 billion from $200 billion, partly because memory chips cost more. "Even at that amount, we will still not have enough capacity to meet all the demand we have in 2026," Jassy said at the time, Benzinga reported. The spending pushed free cash flow to an outflow of $7.6 billion for the 12 months ending in June, per GeekWire.geekwire.com+1

What analysts expect

Analysts expect revenue of about $202 billion, up 12% from a year earlier, and earnings of $1.96 per share, GeekWire reported. Part of the slower growth comes from timing, because Prime Day moved into the second quarter this year. The AWS revenue consensus is about $45.4 billion, and its third-quarter operating margin is expected to be 37.3%, according to S&P Global. In the second quarter, AWS revenue grew 37% to $42.2 billion and the unit had $496 billion in signed contracts it hadn't yet delivered. "Capacity, not demand, is the constraint," Dan Ives of Yorkville Ives wrote about the industry, per GeekWire.spglobal.com+1

Results could also swing because of Amazon's stake in Anthropic, which drove $53.4 billion in pre-tax gains last quarter. Anthropic filed for a Nasdaq ↘ 0.31% IPO this week, GeekWire reported.geekwire.com

Traders bet on spending

On Polymarket, which runs on Polygon ↘ 0.95%, traders gave a 92% probability that Amazon's 2026 capex will top $200 billion. The odds fell to 66% for more than $210 billion and 51% for more than $220 billion, Benzinga reported. The contracts will be settled using Amazon's fourth-quarter 2026 earnings materials.benzinga.com

Spending across the industry keeps climbing. Consensus estimates have hyperscaler capex more than doubling to $762 billion in 2026 and reaching $1.3 trillion in 2027, S&P Global said. Microsoft ↘ 2.26% and Alphabet ↗ 2.00% reported on Wednesday, a day before Amazon. Benzinga said Microsoft beat estimates, while Alphabet missed and its shares fell.spglobal.com+1