Amazon (NASDAQ: AMZN) shares closed lower on Friday even as Chief Executive Officer Andy Jassy said demand for Amazon Web Services (AWS) has outstripped supply, with cloud capacity largely sold out through 2027 and a good chunk of 2028 already spoken for.

The stock finished the regular session at $248.00, down $2.38, or 0.95%. It edged up to $248.80 in after-hours trading, a gain of $0.80, or 0.32%. Amazon also plans roughly $220 billion in capital spending for 2026 and continues to hold some capacity back for on-demand customers on EC2 and Bedrock.

Jassy delivered the demand update during a video podcast appearance alongside Andreessen Horowitz co-founder Ben Horowitz and general partner Erik Torenberg. He said AWS is struggling to keep up with demand from AI labs and enterprises, and that most of the company's cloud capacity through 2027 has been sold.

Capacity Is Spoken For

“2027 is largely sold out,” Jassy said. He added that “a chunk of 2028 is sold out” as well.

Capacity for 2026 is already fully committed, meaning the squeeze is not a future problem but a current one. AWS does keep some room for on-demand needs: Jassy said the company leaves a certain amount for its inference service, Bedrock, and for EC2, but the big chunks are taken.

EC2 provides cloud servers for running applications, while Bedrock gives customers access to AI models for building generative AI applications. AI developers and business clients want more computing power to train and run their models, and that demand is pressing on the capacity AWS has available. For buyers, the sold-out calendar means compute has to be reserved well ahead of need — a notable shift for services built around on-demand availability — while the advance commitments give Amazon a clearer read on future demand as it sizes its infrastructure buildout.

Spending Plans

Earlier this year, Amazon said it would spend about $220 billion on capital expenditure in 2026. Even at that level, supply is not keeping pace with demand. Jassy said Amazon “could invest a lot more and it wouldn’t be a bad use of capital,” pointing to the fact that 2026 cloud capacity is already sold.

Those remarks are likely to get attention from investors. Spending levels have been a talking point for Amazon and other big cloud providers throughout the year, as the largest players pour record amounts into data centers and chips to serve AI workloads.

Jassy’s comments were the main news for the stock on Friday, and shares ended the day lower despite the upbeat demand message.

Third-Quarter Results Next

Amazon is due to report third-quarter results on October 29. Investors will be looking for details on AWS growth, infrastructure spending, and capacity expansion, along with any updates on how quickly new capacity comes online and how much is held back for on-demand customers.

Source: CoinCentral