Amazon lifted its 2026 capital-expenditure plan to $220 billion, an increase of $20 billion it attributes to memory-chip costs. The company says the extra spending still won't be enough to meet computing-capacity demand, pointing to a memory-chip shortage that could persist into 2028 and benefit suppliers such as Micron Technology.
Amazon lifts 2026 capex to $220 billion
Amazon raised its 2026 capital-expenditure plan to $220 billion, up from the $200 billion it had initially projected. On its Q2 earnings call, the company cited memory as the driver of the $20 billion increase.
Even at that spending level, Amazon told investors it won't be able to obtain enough computing capacity to meet demand. The company said its clients are still in the early stages of deploying AI on a wide scale, and inference workloads will keep climbing, pushing demand for memory chips, a commodity whose supply is already tight.
Memory prices have already surged this year
Memory prices have climbed this year amid insufficient supply and surging demand, raising costs for consumers and AI hyperscalers while benefiting chipmakers like Micron. Yet demand hasn't slowed despite the higher prices, a pattern that could point to higher memory prices a year from now.
Outlook stretches toward 2028
Micron's management told investors it expects market tightness to persist beyond 2027. Amazon likewise said it won't bring enough computing capacity to meet demand in 2026 and likely sees that shortfall extending into 2027, with demand for 2028 already emerging because of shortages expected over the next year and a half.
Wall Street projects Micron's revenue will grow at an 85% pace in fiscal 2027, a year that ends in August 2027, with earnings per share rising from $73.43 in fiscal 2026 to $155.56 in fiscal 2027. Micron stock currently trades at 5.3 times its fiscal 2027 earnings estimate.
Source: The Motley Fool
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