Amazon posted record quarterly revenue and strong cloud growth in Q4 — but its stock sunk more than 10% in after-hours trading Thursday after the company missed Wall Street’s profit expectations and revealed plans to spend $200 billion on capital expenditures in the upcoming year.
“With such strong demand for our existing offerings and seminal opportunities like AI, chips, robotics, and low earth orbit satellites, we expect to invest about $200 billion in capital expenditures across Amazon in 2026, and anticipate strong long-term return on invested capital,” Amazon CEO Andy Jassy said in a statement.
That’s well ahead of analyst expectations, and up from the $125 billion that Amazon had estimated for capex in 2025.
Investors are closely watching how much tech companies are spending on infrastructure amid the AI boom. Google said this week that its capex could double this year to as high as $185 billion, and Meta said its spend could reach $135 billion in 2026, almost double from last year. Microsoft’s capital spend reached $37.5 billion in its most recent quarter, up 66% from a year ago.
Amazon’s total capital spending also includes the buildout of its e-commerce fulfillment network and retail stores, which means it’s not directly comparable to Microsoft, Google and others.
Amazon reported $213.4 billion in Q4 revenue, up 14% year-over-year and topping estimates of $211 billion. It’s first time the company has eclipsed $200 billion in quarterly revenue.
The company just missed expectations with earnings per share of $1.95, up from $1.86 in the year-ago period. Net income was $21.2 billion, up from $20 billion last year.
Amazon Web Services, the company’s closely watched cloud computing unit, reported $35.6 billion in Q4 sales, up 24% year-over-year — the fastest growth rate in three years. That topped analyst estimates of 21%.
Amazon’s online store sales grew 10% to $83 billion during the holiday quarter, topping estimates of $82.1 billion. The company continues to face competition from Walmart, which is growing its e-commerce sales and just hit a $1 trillion market capitalization.
Amazon’s market cap is about $2.4 trillion. Its stock is down slightly in the past 12 months.
The company will host its call with analysts at 2 p.m. PT. We’ll be listening for any comments related to the company’s slashing of 16,000 corporate jobs announced last week.
Here are more details from Amazon’s fourth quarter earnings report:
Advertising: The company’s ad business brought in $21.3 billion in revenue in the quarter, up 23% from the year-ago period. Advertising, along with AWS, is a major profit engine.
Third-party seller services: Revenue from third-party seller services was up 11% to $52.8 billion.
Shipping costs: Amazon spent $31.5 billion on shipping in Q4, up 10%.
Physical stores: The category, which includes Whole Foods and other Amazon grocery stores, posted revenue of $5.8 billion, up 5%. Amazon announced last week that it is closing all Amazon Go and Amazon Fresh locations, a total of 72 stores nationwide, concentrating its efforts instead on its Whole Foods Market locations and grocery delivery from Amazon.com.
Headcount: Amazon employs 1.58 million people, up 1% year-over-year, and down slightly from Q3. That figure does not include seasonal and contract workers, and does not reflect the latest job cuts, which took place after the end of the quarter.
Prime: Subscription services revenue, which includes Prime memberships, came in at $13.1 billion, up 14%.
Guidance: The company forecasts Q1 sales between $173.5 billion and $178.5 billion. Operating income is expected to range between $16.5 billion and $21.5 billion, compared with $18.4 billion in the year-ago quarter.
