Amazon Web Services and Nvidia announced AWS will deploy 2 million additional Nvidia GPUs in 2027 and 2028, roughly tripling AWS's total commitment in five months. Nvidia shares jumped on the news while Amazon shares slipped, even as AWS revenue growth accelerates and its capital budget keeps climbing.
AWS will deploy 2 million additional Nvidia GPUs across its global infrastructure in 2027 and 2028, the companies said Wednesday. Yet the market split the two stocks: Nvidia jumped almost 9% on Thursday, while Amazon slipped about 1.5%, trading at about $256.
The commitment roughly tripled in five months
At Nvidia's GTC conference in March, AWS had announced plans to add more than 1 million Nvidia GPUs starting in 2026. Demand has since exceeded those expectations, the companies said, so AWS now plans to add another 2 million GPUs — Nvidia's Blackwell Ultra, Rubin, and Rubin Ultra chips — taking the committed total to more than 3 million.
The companies also plan to build AI factories for the U.S. government, including 100,000 GPUs on secure AWS infrastructure. Amazon's chip unit will work with Nvidia's custom high-bandwidth memory technology in the next generation of Trainium, Amazon's own AI silicon.
A budget that was already $220 billion
Amazon's capital spending was climbing before Wednesday's news. In February, the company estimated 2026 capital expenditures of about $200 billion, then CEO Andy Jassy raised the figure to about $220 billion on July's earnings call, citing the higher cost of memory.
The spending is already showing up on the balance sheet. Amazon's net purchases of property and equipment totaled $169 billion over the trailing 12 months as of the second quarter, up $66.1 billion year over year. Free cash flow swung to an outflow of $7.6 billion, down from an inflow of $18.2 billion a year earlier.
On the July call, Jassy said: "In fact, the demand we already have for 2028 is striking." The new GPUs arrive in 2027 and 2028, past the window this year's budget covers.
AWS growth is accelerating alongside the spending
AWS revenue rose 28% year over year in the first quarter, then accelerated to 37% in the second, reaching $42.2 billion — the segment's fastest growth since 2021. AWS's backlog of signed-but-not-yet-delivered work stood at $496 billion in the second quarter, growing at a triple-digit rate year over year, and AWS's AI revenue run rate has climbed past $25 billion annually, also growing at a triple-digit percentage.
Nvidia's Thursday jump had a driver of its own: the chipmaker reported quarterly results Wednesday afternoon. One Fool analyst argued Amazon's decline reflects which side of the purchase order it sits on — the same 2 million GPUs are future revenue for Nvidia and future spending for Amazon, the side whose free cash flow has already turned negative.
Source: The Motley Fool
Trading involves risk.
Risk Disclaimer
