Amazon’s Rising Capex Amid Memory Chip Shortages
Amazon CEO Andy Jassy revealed that the company’s capital expenditure (capex) budget is set to increase to approximately $220 billion for 2026, up from a prior estimate of $200 billion. This rise is primarily driven by soaring memory chip prices, particularly advanced DRAM and high-bandwidth memory (HBM), crucial for AI applications. Jassy anticipates that shortages in memory supplies could persist until 2028, highlighting strong demand in the AI sector.
The world’s largest tech firms, including Alphabet, Microsoft, and Oracle, are expected to invest over $700 billion in infrastructure by 2026 as they compete for resources essential for AI growth. Amazon alone spent roughly $132 billion on capital projects in 2025. Jassy emphasized that the increased memory costs are a major factor in not being able to meet all anticipated demand in the upcoming years.
Amazon’s focus on memory, particularly from major producers like Micron Technology, underscores the tightening supply conditions that are affecting pricing and availability. This trend indicates a robust outlook for memory chip manufacturers amidst growing hyperscaler investments aimed at expanding AI capabilities.
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