On Oct. 29, Amazon (NASDAQ: AMZN) CEO Andy Jassy made a claim no company has made before: “There has never been a trillion-dollar revenue business, and we may have two of them in the next five to ten years.” He means Amazon Web Services (AWS), the company’s cloud business, and its online stores (which include third-party seller services and physical stores).
Here’s a simple way to think about Amazon right now: It isn’t one bet on artificial intelligence (AI) or one bet on shopping. It’s both, and both sides are getting stronger. That’s why, if I could put $1,000 into just one “Magnificent Seven” tech stock today, it would go there.
Missed AI’s “Act 1”? Act 2 Could Be 16x Bigger. Most investors think they missed the AI boat because they didn’t buy Nvidia in 2005. But according to our analysts, we’re only at the end of “Act 1″—the R&D phase. “Act 2” is the global rollout. Continue »
Microsoft and Alphabet are spending heavily on AI, too; Meta Platforms slid after its spending pushed cash flow negative; and Nvidia, Apple, and Tesla each lean hard on one big product or bet. None of these other Magnificent Seven has as many separate ways to grow as Amazon.
The cloud capacity is selling out as fast as Amazon can build it
AWS rents computing power and storage over the internet, known as cloud computing, so businesses don’t have to run their own servers. Last quarter, its sales jumped 39% to $46 billion, and Jassy expects more than 40% growth in both 2027 and 2028.
AWS’s backlog — the contracts customers have signed but not yet used — hit $578 billion, more than double from a year ago. Jassy said Amazon installs an AI chip about every 14 seconds, and “almost as fast as we install capacity, customers are gobbling it up.”
Here’s the part I keep coming back to: Many of those chips are Amazon’s own. Sales of its Trainium AI chips and Graviton processors are growing at triple-digit rates, and customer commitments for each are up more than 20 times from a year ago. Customers using them saved more than $2 billion in the third quarter alone, and Amazon plans to sell Trainium chips outside AWS in late 2027.
Groceries turn shoppers into regulars
Most people think of Amazon’s store as a grown-up business. I don’t. Units sold are up nearly 15% this year, on top of more than 30 billion items sold last year, and nearly 80% of retail still happens in physical stores.
Fresh groceries and everyday essentials grew about three times faster than the rest of the store and now make up about half of all units sold. Grocery shoppers also buy from nearly four times as many other categories, like home goods and clothes.
