Amazon's $200 Billion Capex Message Is a Nice Boost for These 2 Holdings

AWS re:Invent 2024

Now that we’ve tackled and shared our view on some recent developments with Meta (META) , let’s do the same with Amazon (AMZN) , including implications for our shares of Marvell (MRVL) and Broadcom (AVGO) .

The revelations, which come from CEO Andy Jassy’s 2025 shareholder letter, are positive and bring with them another layer of support for, you guessed it, AI adoption and usage and corresponding demand for AI and data center infrastructure.

So, what did Jassy reveal?

"Three years after AWS launched commercially, it had a $58 million revenue run rate. Three years into this AI wave, AWS’s AI revenue run rate is over $15 billion in Q1 2026 (nearly 260 times larger than AWS at that same point) — and ascending rapidly."

AWS added 3.9 gigawatts (GW) of new power capacity in 2025, expects to double total power capacity by the end of 2027 and is monetizing that capacity as fast as it’s installed.

"Our second version of our custom AI silicon (Trainium2) had about 30% better price-performance than comparable GPUs and has largely sold out. Trainium3, which just started shipping at the start of 2026 and is 30-40% more price-performant than Trainium2, is nearly fully-subscribed. A significant chunk of Trainium4, which is still about 18 months from broad availability, has already been reserved. And, Amazon Bedrock, AWS’s primary (and very fast-growing) inference service, runs most of its inference on Trainium. Demand for Trainium is booming.

"Our annual revenue run rate for our chips business (inclusive of Graviton, Trainium, and Nitro—our EC2 NIC) is now over $20 billion, and growing triple digit percentages YoY.

"There’s so much demand for our chips that it’s quite possible we’ll sell racks of them to third parties in the future.

"We’re not investing approximately $200 billion in capex in 2026 on a hunch. The recent OpenAI commitment (over $100 billion) is an example of this, but there are several other customer agreements completed (and unannounced), or deep in process. Of the AWS capex we expect to spend in 2026, much of which will be monetized in 2027-2028, we already have customer commitments for a substantial portion of it."

Call it very supportive, call it very constructive, either way those comments back the multi-year guidance issued several weeks ago from Marvell and Broadcom.

Before he closed out the shareholder letter, Jassy shared some other comments that caught our eyes:

"Our retail business is now approaching $600 billion in topline, yet roughly 80% of global retail sales still happens in physical stores. That will change.

"AWS is at a $142 billion revenue run rate, and yet 85% of global IT spend remains on-premises. This will change.

"Our Advertising offerings continue to grow and deliver strong returns for brands, while newer businesses like Prime Video, Pharmacy, and Grocery are providing unique customer experiences, growing robustly, and improving their economics.

"We’re on the verge of launching Amazon Leo, just beginning commercial service with Zoox (our autonomous-driving ride-hailing service), and still quite early in what we’ll build in robotics.

"While Amazon Leo is officially scheduled to launch in mid-2026, we already have meaningful revenue commitments from enterprises and governments. Most recently, Delta Airlines, the highest grossing airline in the world, has announced it’s chosen Amazon Leo for its future Wi-Fi, and will begin with 500 planes in 2028. They join other Leo customers like JetBlue, AT&T, Vodafone, DIRECTV Latin America, Australia’s National Broadband Network, NASA, and others."

For those keeping score, that $142 billion run rate for AWS cited by Jassy refers to the figure we get by annualizing AWS’s Q4 2025 revenue of $35.6 billion. In other words, Jassy didn’t break any new ground by sharing that particular figure. The $600 billion run rate for its retail top line feels right when annualize q4 2025 online store, physical store and third-party seller services. What Jassy did not point out is that annualizing that quarter’s Advertising Services revenue puts it at over $80 million, and its subscription services over $52.4. Combined, that’s around $132 million, not too far off the $142 billion for AWS.

The tricky thing with Amazon is breaking down (or, in some cases, building back up) reported revenue figures to determine the size of Prime Video, Pharmacy and Grocery. Amazon Leo could very well land in the same category, but we’re more than happy to roll up our sleeves and puzzle through it, especially as Amazon’s top-line grows, margins expand and EPS move higher.

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At the time of publication, TheStreet Pro Portfolio was long AMZN, AVGO, META and MRVL.