Amazon Could Be About to Reap the Rewards of a Software Spending Boom

Key Points

• A Jefferies survey of 40 IT executives found that 95% expect cloud budgets to increase in 2026, directly supporting AWS demand.
• Cloud spending is projected to grow more than 10% in 2026, up from 9.6% in 2025, with 56% of CIOs planning higher AWS expenditures.
• Despite near-term headwinds including FTC scrutiny and CapEx concerns, the survey data suggests Amazon's infrastructure spending is demand-driven, not speculative.

There's a growing argument that the market has been pricing Amazon.com Inc. NASDAQ: AMZN on fear rather than fundamentals in recent weeks. The CapEx concerns, the FTC noise, and the Blue Origin setback have all combined to leave the stock looking unusually unloved.

But beneath the headlines, the underlying demand picture for one of Amazon's biggest growth engines is suddenly looking very strong. As we'll see below, a new survey of IT executives by Jefferies has just delivered exactly the kind of data point the bulls have been looking for. According to the poll of 40 tech executives, cloud spending is expected to grow more than 10% in 2026, up from 9.6% in 2025.

Even more strikingly, an overwhelming 95% of respondents said they expect their cloud budgets to increase next year.

For Amazon, whose AWS unit is the world's leading cloud provider, that's exactly the kind of demand backdrop that the recent share price weakness has not priced in.

The Survey That Changes the Conversation

Shares of Amazon are currently trading around $240, having recovered modestly from last week's lows but still down meaningfully from the all-time highs set last month. The selling pressure has been driven by a familiar mix of CapEx concerns and a broader cooling in sentiment toward AI infrastructure plays. That backdrop is exactly what makes the Jefferies survey so timely.

The survey showed "bullish spend intentions" for AWS specifically, with 56% of CIOs expecting to spend more on the platform in 2026. While placing AWS slightly behind Microsoft Corp NASDAQ: MSFT in the rankings, the data still strongly endorsed the platform's positioning at a time when the market has been questioning whether Amazon's enormous CapEx spending will translate into meaningful revenue.

Why This Hits Right Where the Market Is Wrong

The reason this matters so much is that it directly challenges the bearish narrative that's been driving the recent selloff. Much of Amazon's underperformance has come down to a single concern—that the company is spending too much on AI infrastructure too fast.

However, the Jefferies survey points to exactly the kind of demand picture that supports the CapEx story. If 95% of CIOs plan to increase cloud spending next year, and AWS is clearly a beneficiary of that trend, then the spending Amazon has been doing on data centers and AI infrastructure isn't speculative. It's being built to meet demand that the customers themselves are explicitly telling analysts they plan to deliver.

In other words, the bulls who've been arguing that the CapEx concern is overblown just got a serious data point to support their case. The market may not have caught onto it yet, but it usually doesn't take long for survey data this constructive to start showing up in analyst notes and revised earnings estimates.

The Bigger Strategic Picture

What makes the survey particularly encouraging is the role of AI within it. About 68% of CIOs now have a dedicated AI budget, and around 11% of overall IT budgets are now allocated to AI workloads. Just as importantly, 73% of respondents said their actual year-to-date AI spending is tracking above their initial budgets, with some companies already having burned through their full annual AI allocation.

For AWS, which sits at the heart of the AI infrastructure stack and counts Anthropic as one of its most important customers, that's exactly the kind of dynamic that should compound into meaningful revenue growth in the quarters ahead.

Combine it with its other deepening enterprise AI partnerships, and the continued momentum within the broader Amazon business, and the bull case at $240 looks considerably more attractive than the recent price action would suggest.

Where That Leaves the Opportunity

To be sure, none of this immediately solves the near-term challenges Amazon faces. The FTC situation is still in play, the broader AI CapEx narrative will take time to shift, and there could be more volatility ahead before sentiment fully turns. The patience tax that comes with owning Amazon right now is real.

But for those willing to look past the noise, the Jefferies survey quietly shifts the underlying argument. The market has been worrying about whether AWS's demand justifies the spending. The customers themselves are now telling analysts it does.