Amazon, accounts above expectations but prepares $200 billion AI spending spree
The share price dropped 10 per cent in the after-market, after having lost 4.56 per cent in the ordinary session.
Amazon ended the fourth quarter of last year with record revenues of $213.39 billion, up 14% and beating analysts' expectations. Profits rose 5.9% to $21.1 billion, broadly in line with expectations. But it was other figures that attracted attention: for 2026 the ecommerce, cloud and technology giant is aiming for capital expenditures of USD 200 billion first and foremost in artificial intelligence, well above the market's projected USD 146.11 billion (a third more) and an increase of almost 60 per cent over the USD 132 billion already invested in 2025.
Amazon's stock, reflecting Wall Street's nervousness over the cost of the AI race, lost 11 per cent in after-hours trading, where the stock had shed 4.56 per cent in ordinary trading.
Other tech giants have upped their bets, from Alphabet's Google to Microsoft and Meta, but the Andy Jassy-led company has outperformed them. "With strong demand for our current seminal offerings and opportunities such as AI, chips, robotics, satellites, we expect to invest around 200 billion across the business and anticipate a strong long-term return," Jassy said. Google has planned annual investments of up to 185 billion and Meta has doubled them to 135 billion.
The balance of the quarter was solid. In the past three months, the Amazon Web Services division, a leader in cloud services and offering services and infrastructure to the development of artificial intelligence, reported revenue growth of 24 per cent to 35.6 billion, which Jassy called the fastest in 13 quarters. Microsoft, however, had done better with Azure, which grew by 39 per cent. So did Google, which posted a 48 per cent increase in the cloud. Quarterly e-commerce revenue rose to 82.9 billion from 75.6 billion a year ago. Advertising raked in 21.32 billion, up 23 per cent from an anticipated 21.16 billion. Subscriptions, from Prime services to music and digital video, counted for 13.12 billion, up 14 per cent.
For the first quarter of the new year, Amazon predicted sales of between 173.5 and 178.5 billion, an increase of 13%-15%, and operating profits of between 16.5 and 21.5 billion.
