AWS Revenue Upside: Three Drivers Consensus May Be Missing

AWS revenue and earnings power are likely to exceed consensus materially because compute scarcity is driving simultaneous capacity, pricing and mix upside.

• AI demand already exceeds available compute supply, and agentic AI use cases typically require hundreds of times more compute than standard chatbot applications; physical and political constraints should keep the shortage in place for several years.
• Amazon expects AWS power capacity to double from 2025 levels by the end of 2027, while Amazon is expected to invest US$220 billion in 2026, implying roughly a doubling of AWS revenue all else equal.
• Cloud capacity contracted in 2022 is being renewed at higher prices: new capacity costs at least twice as much per GW to build on Montaka’s analysis, while Andy Jassy expects demand to exceed feasible supply well into 2027.
• IREN data showed three-year compute contract prices up approximately 125% since November 2025 and five-year prices up approximately 70% by August 2026.
• AWS can capture higher-margin distribution fees through Amazon Bedrock: Anthropic routed 47% of sales through Amazon and Google, with cloud partners receiving fees equal to 16% of sales, in addition to compute revenue.

Takeaway: Montaka sees a high probability that consensus AWS revenue growth forecasts of 34% for 2027 and 29% for 2028 are too conservative, potentially by a considerable margin, although the conclusion depends on sustained AI demand, constrained capacity and the expansion of AWS’s higher-value service mix.