Amazon CEO Andy Jassy Just Delivered Bad News for the Artificial Intelligence (AI) Bears

By Bram Berkowitz – Apr 10, 2026 at 12:59PM ESTKey PointsIn his annual letter to shareholders, Amazon CEO Andy Jassy said he does not see an artificial intelligence bubble.Furthermore, Jassy said that Amazon has strong visibility into future cash flows from the capacity it is spending hundreds of billions on to install.Jassy views AI as a "once-in-a-lifetime" opportunity.Artificial intelligence (AI) stocks have struggled this year, not only because of the Iran War, but also due to waning sentiment toward the sector. The "Magnificent Seven," which includes many of the hyperscalers driving the AI revolution, are collectively down this year. In fact, Microsoft just closed its worst quarter since 2008. While the bears seem more prevalent, many of the bulls are still as confident as ever. One is Amazon (AMZN +1.72%) CEO Andy Jassy, and he just delivered bad news to the AI bears. Jassy doesn't see a bubble Jassy recently dropped his annual letter to shareholders, discussing what happened with the company in 2025 and other relevant market topics, such as AI. The main reason investors have been concerned about AI is that hyperscalers like Amazon are pouring hundreds of billions of dollars into building out the infrastructure needed to support AI. Image source: Getty Images. For instance, Amazon plans to spend roughly $200 billion in capital expenditures, most of which will go toward AI infrastructure. Investors have questioned how companies can make good returns on this level of massive investment. Jassy didn't waste time beating around the bush, quickly going to bat for AI and the monumental effect it would likely have on Amazon: I've followed the public debate on whether this technology is over-hyped, whether we're in 'a bubble,' and if the margins and ROIC (return on invested capital) will be appealing. My strong conviction, at least for Amazon, is that the answers are no, no, and yes. Jassy further said that Amazon is not committing this high level of investment "on a hunch." The company expects much of what's spent this year to be monetized in 2027 and 2028, with customer commitments for most of the capacity being added to Amazon Web Services (AWS). Jassy said that the company is willing to endure short-term headwinds to free cash flow for medium- to long-term gains. ExpandNASDAQ: AMZNAmazonToday's Change(1.72%) $4.01Current Price$237.66Key Data PointsMarket Cap$2.5TDay's Range$235.20 - $240.4352wk Range$165.28 - $258.60Volume2.5MAvg Vol51MGross Margin50.29% Jassy also laid out several arguments, detailing why AI is not a bubble but a "once-in-a-lifetime opportunity." For one, there has never been a technology adopted as quickly as AI, especially given the growth of AI chatbots like ChatGPT and the revenue run rates at OpenAI and Anthropic. AI adoption is happening 10 times faster than the adoption of electricity, Jassy said. Jassy also pointed to AWS's success. When AWS initially launched, it had a revenue run rate of $58 million. Three years into AI, AWS's AI revenue run rate has exploded to over $15 billion. It could arguably be bigger if the company could bring on more capacity. Jassy said that AWS has been monetizing capacity as soon as it is installed. There's a lot that could go wrong, but also a lot that could go right Investors are certainly right to be skeptical of AI. After all, the "Magnificent Seven" will likely spend close to $700 billion on AI-related investments. That number is so big that it's simply hard to fathom. There are other concerns about AI, including circular financing in the industry and whether the world has the resources to support an industry that consumes so much power to run all the data needed to power AI. However, investors should remember that the technology has demonstrated extraordinary capabilities, with immense potential to fundamentally disrupt nearly all aspects of society as we know it. Investors should also remember that people like Jassy are among the most experienced and brightest minds in the world, and they wouldn't be likely to be pouring this much money into AI if they didn't have high conviction. Furthermore, Wall Street analysts are projecting strong earnings growth for companies like Amazon over the next few years. It's quite possible that AI is a once-in-a-lifetime opportunity, and the hyperscalers are right to spend heavily now and ask questions later. It's hard to know the answer today, but investors should set aside their personal biases and always examine both sides of an investment thesis.Read NextApr 10, 2026 •By Jose Najarro5 AI Stocks to Buy After Amazon's CEO Said This About AWS GrowthApr 10, 2026 •By Keithen DruryAmazon Has a Secret Weapon in AI That Makes the Stock a Screaming BuyApr 10, 2026 •By Will HealyAmazon Will Impose a Temporary Fuel Surcharge on Some Customers.

Should Investors Worry?Apr 10, 2026 •By Lawrence NgaNew to Investing? Here's Why Amazon Stock Is a Great First Buy.Apr 9, 2026 •By Parkev Tatevosian, CFAShould Investors Buy Amazon Stock Instead of Walmart Stock?Apr 9, 2026 •By Howard SmithStock Market Today, April 9: Amazon Surges After CEO Details AI and AWS Growth PlansAbout the AuthorBram Berkowitz is a contributing Motley Fool stock market analyst covering financials, technology, consumer goods, and macroeconomic trends.

Before The Motley Fool, Bram worked in equity research covering bank stocks and as a reporter for local publications. He holds FINRA Series 7 and 66 licenses, as well as a bachelor’s degree in business with a minor in economics from Syracuse University.TMFBramX@BramBerkoStocks MentionedAmazonNASDAQ: AMZN$237.64(+1.71%)+$3.99*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.